company presentation 1 August 2016 Notice This document and the - - PowerPoint PPT Presentation

company presentation
SMART_READER_LITE
LIVE PREVIEW

company presentation 1 August 2016 Notice This document and the - - PowerPoint PPT Presentation

company presentation 1 August 2016 Notice This document and the information contained herein are for information purposes only and do not constitute a prospectus or an offer to sell or a solicitation of an offer to buy any securities in the


slide-1
SLIDE 1

company presentation

1 August 2016

slide-2
SLIDE 2

This document and the information contained herein are for information purposes only and do not constitute a prospectus or an offer to sell or a solicitation of an offer to buy any securities in the United States. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"),

  • r the laws of any state of the United States, and may not be offered, sold or otherwise transferred in the United States absent registration or pursuant to an available exemption

from registration under the Securities Act. Neither RWE International SE (the "Company") nor one of its shareholders, including RWE AG ("RWE"), intends to register any securities referred to herein in the United States. This document does not constitute an offer to sell or a solicitation of an offer to buy any securities. Any offer will be made exclusively through and on the basis of a prospectus that must be published in Germany and Luxembourg as supplemented by additional information related to the offer outside of Germany and Luxembourg. The prospectus will be available free of charge at RWE International SE, Opernplatz 1, 45128 Essen as well as on the internet on the Company's website. No money, securities, or other consideration is being solicited, and, if sent in response to the information contained herein, will not be accepted. This document does not constitute an offer document or an offer of securities to the public in the U.K. to which section 85 of the Financial Services and Markets Act 2000 of the U.K. applies and should not be considered as a recommendation that any person should subscribe for or purchase any securities as part of the Offer. This document is being communicated only to (i) persons who are outside the U.K.; (ii) persons who have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (iii) high net worth companies, unincorporated associations and other bodies who fall within article 49(2)(a) to (d) of the Order (all such persons together being referred to as "Relevant Persons"). Any person who is not a Relevant Person must not act

  • r rely on this communication or any of its contents. Any investment or investment activity to which this communication relates is available only to Relevant Persons and will be

engaged in only with Relevant Persons. This document should not be published, reproduced, distributed or otherwise made available, in whole or in part, to any other person without the prior consent of the Company. 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. Words such as "anticipate","believe", "estimate", "intend", "may", "will", "expect", "plan", "project", "should" and similar expressions are intended to identify forward-looking statements. 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 general economic and social environment, business, political and legal conditions, fluctuating currency exchange rates and interest rates, price and sales risks associated with a market environment in the throes of deregulation and subject to intense competition, changes in the price and availability of raw materials, risks associated with energy trading (e.g., risks of loss in the case of unexpected, extreme market price fluctuations and credit risks resulting in the event that trading partners do not meet their contractual obligations), actions by competitors, application of new or changed accounting standards or other government agency regulations, changes in, or the failure to comply with, laws or regulations, particularly those affecting the environment and water quality (e.g., introduction of a price regulation system for the use of power grid, creating a regulation agency for electricity and gas or introduction of trading in greenhouse gas emissions), changing governmental policies and regulatory actions with respect to the acquisition, disposal, depreciation and amortisation of assets and facilities, operation and construction of plant facilities, production disruption or interruption due to accidents

  • r other unforeseen events, delays in the construction of facilities, the inability to obtain or to obtain on acceptable terms necessary regulatory approvals regarding future

transactions, the inability to integrate successfully new companies within the RWE International SE Group to realise synergies from such integration and finally potential liability for remedial actions under existing or future environmental regulations and potential liability resulting from pending or future litigation. Any forward-looking statement speaks

  • nly as of the date on which it is made. Neither the Company, RWE nor any of their affiliates intend to or assume any obligation to update these forward-looking statements.

Notice

slide-3
SLIDE 3

Introduction

slide-4
SLIDE 4

page 2 innogy · company presentation · 1 August 2016

innogy’s management board

Note: the term ‘innogy’ throughout this presentation refers to the future name of RWE International SE which will trade under ‘innogy SE’ from autumn 2016.

Chief Executive Officer Peter Terium Chief Financial Officer Bernhard Günther COO Grid & Infrastructure Hildegard Müller COO Retail Martin Herrmann COO Renewables Hans Bünting CHO & Labour Director Uwe Tigges

slide-5
SLIDE 5

page 3 innogy · company presentation · 1 August 2016

Formation of a leading European utility

1 Post money.

RWE AG shareholders innogy shareholders RWE AG Conventional Power Generation Supply & Trading innogy Grid & Infrastructure Retail Renewables ~90% ~10% 100%

Target structure Rationale for transformation and IPO of innogy > Increasing divergence of development and prospects of individual business units > Hence creation of homogenous business portfolios with clear strategic focus > Ability to invest in growing businesses, supporting the energy transition > Unlock value through enhanced transparency via separate listing of innogy > Increased flexibility to cope with future funding needs; innogy shareholding as liquid asset for RWE AG Envisaged transaction structure > Listing of ~10%1 of innogy via primary offering envisaged for late 2016, subject to market conditions > While considering all options, placing of further stakes of innogy by RWE AG via secondary offer possible at the same or later point in time

slide-6
SLIDE 6

page 4 innogy · company presentation · 1 August 2016

IPO of innogy as catalyst for corporate development

CAPITAL

Financial constraints Solid balance sheet Integrated utility Clean play

MANAGEMENT FOCUS

Volume focus Strict value focus

VALUE CREATION

Creation of innogy

slide-7
SLIDE 7

Capital Market Day · 30 June 2016

Key investment highlights Financials Grid & Infrastructure Retail Renewables Wrap-up

Content

slide-8
SLIDE 8

Key investment highlights

slide-9
SLIDE 9

page 7 innogy · company presentation · 1 August 2016

innogy as blueprint for the utility of the future in an

  • ngoing transformation of the sector

Retail

Renewables Grid & Infrastructure

Decarbonisation Decentralisation Digitalisation

Key investment highlights

slide-10
SLIDE 10

page 8 innogy · company presentation · 1 August 2016

1 Based on distributed volume; as of 2015. 2 Regulated asset base. Numbers based on latest notification by regulator or based on calculations in latest filings with regulators. Expected increase in German regulated asset base calculated as RAB 2010/2011 plus net investments (post concession gains/losses) in regulated assets in the years 2010/2011 to 2015/2016E, assuming full recognition by the regulator. Generally, RABs from different regulatory regimes are not directly comparable due to significant methodological differences (e.g. regulatory periods, regulatory depreciation periods). Also, throughout this presentation, RABs are always stated excluding pro-rata share of RAB from participations that are not fully consolidated. 3 Based on volume sold; as of 2014. 4 With respect to the Retail segment, the term customers refers to customer contracts (electricity and gas contracts counted separately) throughout the presentation. 5 Source: Bloomberg New Energy Finance; asset owner database; as of March 2016. 6 As of 31 December 2015; pro-rata view, excluding Zephyr portfolio. Excluding 0.3GW renewables capacity from fully consolidated participations related to the Grid & Infrastructure segment.

Introducing innogy – three strong segments…

Key investment highlights

€13.3bn

total RAB2

+9% increase

expected for German RAB2 largest electricity DSO in Germany1

#1

23m customers4

largest electricity retailer in Germany3

3.1GW installed capacity6

worldwide in

  • ffshore wind

by installed capacity5 Netherlands/Belgium Germany East United Kingdom Germany East

Renewables Grid & Infrastructure Retail

#1 #3

slide-11
SLIDE 11

page 9 innogy · company presentation · 1 August 2016

…combining a strong regulated profile with a solid platform for growth

1 Total includes €(0.2)bn presented as ‘Other, consolidation’ in the combined financial statements. 2 Includes regulated and quasi-regulated share of EBITDA. 3 The term ‘capex’ throughout the presentation refers to capital expenditures on intangible assets, property, plant and equipment. 4 Includes capex from ‘Other, consolidation’.

Key investment highlights

Share of regulated business Capex breakdown EBITDA breakdown

Renewables €0.8bn Grid & Infrastructure €2.9bn

€4.5bn EBITDA 2015¹

Retail €1.0bn

€4.5bn EBITDA 20151

Regulated2 ~60% Renewables €2.1bn Grid & Infrastructure €3.6bn

€6.4bn capex 2013-153,4

Retail €0.7bn

slide-12
SLIDE 12

page 10 innogy · company presentation · 1 August 2016

Platform for growth Focus on value creation

innogy offers a compelling value proposition

Key investment highlights

Resilient financial profile Stable business Unique European asset base

1 2 3 4 5

Capitalise on evolving energy system

slide-13
SLIDE 13

page 11 innogy · company presentation · 1 August 2016

Key investment highlights

1 Market positions based on volumes, or, in the case of Czech Republic, Poland, Netherlands and Belgium, based on customer numbers, as per latest available data, electricity and gas markets counted separately. 2 By installed capacity. Source: Company estimate based on competitors’ disclosure, regulatory reports and research reports.

Focus on Europe – anchored in Germany Largely CO2 free Limited exposure to commodity prices No nuclear liabilities Enabler of energy transition

    

Unique asset mix and diversified European footprint

Grid & Infrastructure Retail Renewables Strategic partnership

Leading market positions across countries in Europe... …with a distinct asset profile

Market presence

574,000

km total grid

4x #1

positions1

#3

worldwide in offshore wind2

1

slide-14
SLIDE 14

page 12 innogy · company presentation · 1 August 2016

Today Capital increase/ innogy IPO Sell-down by RWE AG

Nuclear provisions fully covered by RWE AG’s asset base – no nuclear related liabilities with innogy

Key investment highlights

1 Does not represent RWE AG‘s balance sheet accounts. 2 Post money.

innogy not liable for nuclear liabilities

> When pooling the three business segments – Grid & Infrastructure, Retail and Renewables – the relevant legal entities have either been merged into, or transferred by way of a share transfer to innogy > For none of the carve-out transactions did we use the instrument of a split-off from RWE AG > In this way, we sought to ensure that we will not be held liable for RWE AG's historic liabilities (in particular nuclear liabilities) under existing German law > From a commercial perspective, RWE AG’s asset base remains unchanged in light of the envisaged transaction

1

RWE AG’s asset base1 remains unchanged in light of the envisaged transaction

GenCo + Trading

RWE AG’s asset base

100% stake in Grid, Supply & Renewables ~90% RWE stake in innogy ~10%2 stake new investors Capital increase via ~10%2 IPO

illustrative/simplified

GenCo+ Trading GenCo+ Trading 51%-90% RWE stake in innogy Cash proceeds from sell- down 10%-49% stake new investors

slide-15
SLIDE 15

page 13 innogy · company presentation · 1 August 2016

Grid & Infrastructure Retail

Stable business profile across segments reflected in ~60% of group EBITDA from regulated activities1

Key investment highlights

1 Includes regulated and quasi-regulated business activities. 2 Increase predominantly due to first-time full consolidation of VSE. 3 Includes long-term contracts.

Renewables

Largely regulated and predictable earnings Stable and diversified business in Continental Europe Quasi-regulated3 earnings – platform for further growth

2015 EBITDA €0.8bn 2015 EBITDA €1.0bn 2015 EBITDA €2.9bn

Customer base development (m) 23.3 22.9 23.22 2013 2014 2015 Quasi- regulated3 share ~60% Regulated share >80%

2

slide-16
SLIDE 16

page 14 innogy · company presentation · 1 August 2016

Resilient EBITDA supporting strong capex spend... …additionally backed by solid capital structure

Solid capital structure as foundation for stringent business development

Key investment highlights

Attractive mix of cash generative and growth assets ~4.0x target leverage (net debt1/EBITDA) Credit ratios commensurate with strong rating profile Balance sheet strength to enable growth investments    

4.2 4.3 4.5 2.3 2.1 2.0

2013 2014 2015

EBITDA (€bn) Capex (€bn)

1 For composition of net debt see slide 41.

3

slide-17
SLIDE 17

page 15 innogy · company presentation · 1 August 2016

Solid platform for future growth

Turnaround of UK retail business well on track Efficiency programme: integral part of management agenda   Strict investment criteria to ensure profitable growth Stringent segment-specific set of hurdle rates   Capital increase as enabler for future growth ~€6.5bn of capex1 2016-18E

Platform for growth Well-defined investment strategy Operational excellence

Key investment highlights

1 Including financial investments.

4

slide-18
SLIDE 18

page 16 innogy · company presentation · 1 August 2016

Create options for the future

> Develop new business models > Enable innovation Key investment highlights

Lever core competencies

  • Expand and upgrade existing asset base
  • Focus on efficiencies and operational improvements

Lever core competencies

> Expand and upgrade existing asset base > Focus on efficiencies and operational improvements

Capture new business opportunities

> Enter new markets and new technologies > Grow in adjacent business areas

Our investment plan builds on measured steps

4

slide-19
SLIDE 19

page 17 innogy · company presentation · 1 August 2016

Germany East

Renewables Grid & Infrastructure Retail

Green investments Support the integration of renewable energy sources Smart investments Manage the costs of the energy transition Growth in selected markets Execute current pipeline Market opportunities Benefit from continued support for renewable energy sources Expansion opportunities Growth in new markets and new technologies UK turnaround Customer focus Capture the increased strategic value of customers Energy+ Proactively manage emerging customer needs Market entry in adjacent markets Key investment highlights

Building on our core competencies creates compelling mid-term prospects

market development innogy focus

Operational excellence Efficiency improvements

4

Netherlands/Belgium Germany East United Kingdom

slide-20
SLIDE 20

page 18 innogy · company presentation · 1 August 2016

1 Proof of concept.

Key investment highlights

Decision point 1 Decision point 2

Insights Ideation Build and pilot Handover

POC1 POC1

innogy Innovation Hub Defining focus topics

Operational business/ corporate start-up

Strategic partnering Berlin/Essen Israel USA

How innogy drives innovation of the future energy system within its Innovation Hub

4

shine InnogyVentureCapital

slide-21
SLIDE 21

page 19 innogy · company presentation · 1 August 2016

1 Small and medium-sized enterprises.

Key investment highlights Sector challenge

SMEs1 in the production sector have a lack of transparency in their production units and no knowledge how to increase performance

innogy‘s approach

Retrofit sensors in combination with an analysis web tool generate real time information about production processes and energy usage on machine level

Customer value

SMEs are able to minimise energy costs and identify breakdown risks as well as increase machine utilisation. consenze enables customers to improve decision making

Idea Phase: pilot

Retail customers expect ever more assistance from their energy supplier in helping to understand, control and reduce their energy usage Real-time and appliance level energy insights, provided to retail customers through their innogy company’s app, powered by a common data and analytics platform Reduced energy expenditure and greater sense of control. Higher customer engagement and trust, more willingness to stay, buy and recommend its supplier

PERSONAL ENERGY ADVICE Phase: pilot

Two innovative business models – optimising production processes and energy management application

4

slide-22
SLIDE 22

page 20 innogy · company presentation · 1 August 2016

Our key investment principles to safeguard shareholder value

Key investment highlights Prudent capital allocation and investment profile

Focus on growth opportunities in core markets Flexible capital allocation approach: competing projects across segments Management highly incentivised for value creation Majority of capex into regulated business Strict investment framework with conservative hurdle rates

5

slide-23
SLIDE 23

page 21 innogy · company presentation · 1 August 2016

1 Adjusted net income generally excludes one-off effects, including the entire non-operating result as well as associated tax effects. 2 Based on adjusted net income.

Attractive dividend policy based on pay-out ratio of 70-80% of adjusted net income1 Pay-out ratio supported by strong operating cash flows and backed by solid financial structure Dividend policy compatible with innogy‘s target of an investment grade rating Anticipated payment of full dividend for fiscal year 2016 Management incentive scheme with clear focus on total shareholder return

Focus on attractive shareholder returns

  

Key investment highlights

70-80% dividend pay-out ratio2

5

slide-24
SLIDE 24

page 22 innogy · company presentation · 1 August 2016

Management incentives build on proven RWE scheme – adaption to new business environment

Key investment highlights

1 Further details subject to supervisory board approval of RWE International SE (in future: innogy SE).

innogy management incentive scheme well balanced with a clear focus on total shareholder return1 Individual annual bonus scheme Long-term incentive plan > Based on the economic development of the company, individual and collective performance as well as performance with regards to corporate responsibility and employee motivation > Aims to reward the achievement of long-term strategic objectives while facilitating the capital market orientation > Conditional right to receive a pay-out in cash following a period of four years > Pay-out dependent on achievement of performance targets derived from the strategic planning and set before the first tranche start (‘3-year IPO business plan’) and based on the share price development as well as the accumulated dividends paid to shareholders (total shareholder return)

5

slide-25
SLIDE 25

page 23 innogy · company presentation · 1 August 2016

Corporate governance – innogy with high degree of independence reflected in its supervisory board structure

Key investment highlights > Target composition

  • RWE AG represented by one management board

member, designated CFO Markus Krebber

  • Werner Brandt and Frank Bsirske in personal union as

supervisory board chairman and supervisory board deputy chairman for RWE AG and innogy > Audit committee to be formed mainly from independent board members > Envisaged three-step approach for filling and confirming supervisory board seats

  • 1 July 2016: three headed supervisory board in place
  • 1 September 2016: 20 members supervisory board
  • Spring 2017: confirmation of 10 shareholder

representatives by annual general meeting

Envisaged composition and staffing process Envisaged supervisory board structure

> Two-tier board structure – 20 members, thereof 10 shareholder and 10 employee representatives

slide-26
SLIDE 26

page 24 innogy · company presentation · 1 August 2016

Corporate governance – ‘agreement on basic principles’ sets clear and stable rules going forward

Key investment highlights

Key principles governing innogy/RWE relationship Selected features on ‘agreement on basic principles’ between innogy and RWE

> Both parties – RWE AG and innogy – shall be in the position to pursue their strategic, operational and financial targets individually and independent from each other > Shortly prior to the IPO the domination agreement between innogy and RWE will be terminated > All intercompany relations and agreements to be carried out at arm’s length > Non-compete clause states that RWE is largely restrained from competing in innogy’s core businesses until 31 December 2019 > RWE will manage innogy as a financial investment

  • RWE AG will not impose strategic and financial

targets and is not involved in planning and management incentive discussions

  • Investment decisions at innogy will not be

subject to approval by RWE AG

slide-27
SLIDE 27

page 25 innogy · company presentation · 1 August 2016

4 1 2 3 5

Unique European asset base anchored in Germany, leading positions across many countries Stable business well invested to yield largely regulated and predictable returns Resilient financial profile backed by strong cash generation and solid capital structure Solid platform for growth driven by

  • perational excellence supported by

IPO proceeds Focus on value creation

innogy’s key characteristics – large and stable business with attractive growth prospects

~60%

share of regulated3 EBITDA

€13.3bn

total RAB1

3.6GW

renewables capacity2

23m

customers

+9% increase

expected for German RAB1

>[95]%

Efficiency factor in Germany

Strong Development of SAIDI / SAIFI rates

Among DSOs in Eastern Markets3

~70%

CFOA4/EBITDA (average 2013-15)

~4.0x

target leverage net debt/EBITDA

Strict capital discipline 70-80%

dividend pay-out ratio based on adjusted net income Focus on further

efficiencies ~€6.5bn capex5

(2016-18E)

1 Numbers based on latest notification by regulator or based on calculations in latest filings with regulators. Expected increase in German regulated asset base calculated as RAB 2010/2011 plus net investments (post concession gains/losses) in regulated assets in the years 2010/2011 to 2015/2016E, assuming full recognition by the regulator. Generally, RABs from different regulatory regimes are not directly comparable due to significant methodological differences (e.g. regulatory periods, regulatory depreciation periods). Also, throughout this presentation, RABs are always stated excluding pro-rata share of RAB from participations that are not fully consolidated. 2 As of 31 December 2015; accounting view; includes 3.3GW from Renewables segment (excluding Zephyr portfolio) and 0.3GW renewables capacity from participations related to the Grid & Infrastructure segment. 3 Includes regulated and quasi-regulated business activities. 4 Cash flow from operating activities after interest and tax. 5 Including financial investments.

Key investment highlights

Set for

mid-term growth

slide-28
SLIDE 28

Financials

slide-29
SLIDE 29

page 27 innogy · company presentation · 1 August 2016

…creating shareholder value …translates into strong cash generation and a solid capital structure…

By division1 By regulated share CFOA/EBITDA Target leverage

Creating value for innogy shareholders – based on stable earnings and a strong financial profile

Financials Attractive dividend policy Prudent growth

A stable and attractive earnings profile…

~70%

  • avg. 2013-15

~4.0x net debt/ EBITDA 70-80%

  • f adjusted

net income payout ratio Strict investment criteria

Renewables 17% Retail 21% Grid & Infrastructure 61%

2015 EBITDA €4.5bn

Regulated share2 ~60%

1 Segment breakdown based on sum of operating segment results (€4.7bn). Total includes €(0.2)bn presented as ‘Other, consolidation’ in the combined financial statements. Numbers might not add up due to rounding differences. 2 Includes regulated and quasi-regulated business activities.

slide-30
SLIDE 30

page 28 innogy · company presentation · 1 August 2016

Historical financials reflective of the current scope of innogy, set-up of target capitalisation ongoing

1 An exception applies to companies that are part of the business of innogy, e.g. shares in windfarms that were sold by RWE Innogy, or the sale of certain entities with the simultaneous signing of a long-term supply contract that just resulted in a change of the sales channel during the reporting periods of the combined financial statements. These entities are included in the combined financial statements until their respective sale. 2 Post money.

Financials

General structure

> Audited IFRS combined financial statements for the years 2013, 2014 and 2015 > Consolidated financials as of H1 2016 for innogy Group currently being prepared

Scope of companies

> 2013-15 innogy Group effectively presented as sum of RWE’s three segments Grids/Participations/Other, Supply and Renewables

  • Only few carve-out transactions where assets remained with RWE (e.g. Mátra and Markinch)
  • Businesses sold during 2013-15 (e.g. NET4GAS)1 not included in scope

Capital structure

> 2015 balance sheet not representative of innogy’s capitalisation going forward > Capitalisation as per H1 2016 will be reflective of all relevant intercompany transactions (purchase price payments related to formation of innogy) > Further changes to capitalisation resulting from

  • Cash capital contribution of €0.9bn and debt/equity swap of €1.0bn executed in July 2016
  • ~10%2 primary capital increase at IPO

Other

> One-offs and non-recurring effects in innogy financials affecting comparability of historic performance

slide-31
SLIDE 31

page 29 innogy · company presentation · 1 August 2016 0.3 0.4 0.6 0.3 0.2 0.2 0.2 0.2 0.2 0.4 0.3 (0.1) 1.1 1.1 1.0 2013 2014 2015

innogy is infrastructure-like with roughly 60% regulated1 earnings driven by stable grid business

Note: numbers may not add up due to rounding differences. 1 Includes regulated and quasi-regulated business activities. 2 Capex intensity defined as capex/EBITDA. Capex excluding financial investments. 3 Includes long-term contracts.

Financials

Grid & Infrastructure EBITDA (€bn) Renewables EBITDA (€bn) Retail EBITDA (€bn)

>80% Share of quasi-regulated EBITDA 20153 ~60% Share of regulated EBITDA 2015¹ ~20% Capex intensity Ø 2013-152

Germany NL/BE East UK 0.8 0.6 0.9 2.0 2.2 2.0 2.8 2.9 2.9 2013 2014 2015 G&I East G&I Germany 0.4 0.5 0.8 2013 2014 2015 0.7 0.8 1.1

Retail EBITDA excl. UK 2013 2014 2015 2013 2014 2015 2013 2014 2015

slide-32
SLIDE 32

page 30 innogy · company presentation · 1 August 2016

Grid & Infrastructure Germany – stable regulatory returns and operational excellence

1 Income from not fully consolidated participations. 2 Excluding financial investments.

Financials

Comments

EBITDA development > Decrease in 2015 primarily driven by lower earnings from disposal of grid assets (€187m in 2014 to €153m in 2015), the sale of LEW high voltage grid to Amprion resulting in book gains during 2014 and higher grid maintenance costs as well as restructuring costs related to early retirement scheme > Increase in 2014 due to grid disposals (from €63m in 2013 to €187m in 2014), above mentioned sale and effects from the efficiency enhancements launched in 2012 > D&A includes impairment charges on gas storage assets of €101m in 2014 and further impairments in 2015 Capex > Strong increase in 2015 driven by higher grid infrastructure

  • ptimisation investments

> Capex continuously above D&A in all years supporting RAB growth € million 2013 2014 2015

EBITDA 1,999 2,222 2,016 t/o operating income from investments1 254 251 233 Operating D&A (668) (769) (734) Operating result 1,331 1,453 1,282 Capex2 841 856 968 Capex/operating D&A 1.3 x 1.1 x 1.3 x EBITDA – capex 1,158 1,366 1,048

Grid & Infrastructure Germany

slide-33
SLIDE 33

page 31 innogy · company presentation · 1 August 2016

Grid & Infrastructure East – continuous efficiency enhancement reflected in operating results

1 Income from not fully consolidated participations. 2 Excluding financial investments.

Financials

Grid & Infrastructure East Comments

EBITDA development > Increase in 2015 mainly driven by the revaluation gain of €143m from the first-time consolidation of VSE in Slovakia, improved regulatory conditions for the Czech gas distribution grid leading to increased WACC, higher gas volumes from favorable weather conditions – partly offset by decreased gas storage margins > Decrease in 2014 mainly driven by reduction in gas volumes as a consequence of milder weather, which also impacted gas storage margins due to decreased seasonal spread > D&A increased in 2015 as a result of the first-time consolidation of VSE Capex > Increase in 2015 primarily resulting from the first-time full consolidation of VSE and increased investments in Hungarian grid to meet the minimum regulatory requirements following capex cuts in previous years > Capex significantly above D&A in all years supporting RAB growth € million 2013 2014 2015

EBITDA 791 639 862 t/o operating income from investments1 45 50 61 Operating D&A (184) (188) (214) Operating result 607 451 648 Capex2 276 275 337 Capex/operating D&A 1.5 x 1.5 x 1.6 x EBITDA – capex 515 364 525

slide-34
SLIDE 34

page 32 innogy · company presentation · 1 August 2016

Retail Germany – innogy’s largest retail segment profiting from leading market position

1 Excluding financial investments.

Retail Germany Comments

EBITDA development > Strong increase in 2015 driven by release of provisions, mainly related to legal risks in connection with customer supply contracts which were mitigated in 2015 (€81m). In addition, positive effects from efficiency enhancement programme, a larger customer base and higher gas sales > 2013 negatively affected by €142m realised losses in our hedge book due to unfavourable wholesale price developments > Adjusted for those effects, results were stable in 2013 and 2014 > D&A increase in 2014 and 2015 due to depreciation of biomass activities transferred from Renewables to Retail in 2014 Capex > Low capex intensity > Capex in 2014 and 2015 impacted by energy+ business, mainly higher investments in CHP generation units € million 2013 2014 2015

EBITDA 279 394 583 Operating D&A (24) (36) (38) Operating result 255 358 545 Capex¹ 29 46 53 Capex intensity (Capex/EBITDA) 10% 12% 9% EBITDA – capex 250 348 530

Financials

slide-35
SLIDE 35

page 33 innogy · company presentation · 1 August 2016

Retail NL/BE – strong position in stable Dutch and Belgian market

1 Excluding financial investments.

Retail NL/BE Comments

EBITDA development > Increase in 2015 mainly due to recovery from weather- affected results in 2014 and marketing of new supply

  • fferings

> Decrease in 2014 due to mild weather and competitive price

  • pressures. Negative effects partly offset by new supply
  • fferings and efficiency improvements

> From 2015, weather induced effects largely hedged > D&A decrease in 2015 due to phasing-out of allocated acquisition costs for our subsidiary in NL and decreased depreciation related to IT systems Capex > Low capex intensity € million 2013 2014 2015

EBITDA 257 191 236 Operating D&A (59) (53) (42) Operating result 198 138 194 Capex¹ 14 9 25 Capex intensity (Capex/EBITDA) 5% 5% 11% EBITDA – capex 243 182 211

Financials

slide-36
SLIDE 36

page 34 innogy · company presentation · 1 August 2016

Retail East – stable earnings contribution in growing Eastern European markets

1 Excluding financial investments.

Retail East Comments

EBITDA development > Increase in 2015 mainly driven by revaluation gain of €42m from first-time full consolidation of VSE > Slight decrease in 2014 driven by milder weather and increased competition > D&A decreased in 2014 due to several smaller impairments in Czech Republic in 2013 Capex > Low capex intensity € million 2013 2014 2015

EBITDA 211 190 234 Operating D&A (23) (6) (6) Operating result 188 184 228 Capex¹ 9 9 20 Capex intensity (Capex/EBITDA) 4% 5% 9% EBITDA – capex 202 181 214

Financials

slide-37
SLIDE 37

page 35 innogy · company presentation · 1 August 2016

Retail UK – burdened by operational issues; recovery well

  • n track

1 Excluding financial investments. 2 Includes (i) net effects of EUR 60 million related to charges concerning erroneous and late invoicing, the build-up of provisions for regulatory charges and reviews and the release of provisions for customer paybacks and (ii) net effects of EUR 59 million related to billing issues due to changes in revenue estimation.

Retail UK Comments

EBITDA development > Decrease in 2015 mainly driven by severe process- and system-related issues in the billing of household customers. In addition, we were facing regulatory investigations. Overall negative one-off effects from the billing and regulatory issues amounted to €119m2. Additionally, increasing competitive pressure leading to higher churn rates and margin pressure > Decrease in 2014 mainly driven by initial repair and workaround measures in relation to our IT system, but also mild weather, customer losses and the sale of Telecom Plus portfolio partly offset by release of provisions > 2013 was affected by one-off gain from sale of Telecom Plus Capex > Structurally different capex profile from other countries due to the requirement for investments in IT infrastructure > Increase in 2014 and 2015 due to non-recurring investments in the IT and smart meter infrastructure in the UK € million 2013 2014 2015

EBITDA 366 294 (65) Operating D&A (76) (67) (72) Operating result 290 227 (137) Capex¹ 106 148 189 Capex intensity (Capex/EBITDA) 29% 50% nm EBITDA – capex 260 146 (254)

Financials

slide-38
SLIDE 38

page 36 innogy · company presentation · 1 August 2016

Renewables – strong recent growth track record

1 Excluding financial investments.

Renewables Comments

EBITDA development > 2015 increase driven by the commissioning of offshore wind farms Nordsee Ost and Gwynt y Môr as well as higher volumes and increased utilisation levels of existing capacities > 2015 result also affected by one-off effects from gains from the sale of a 75% stake in Galloper (€93m), the Gwynt y Môr network infrastructure (€30m) and other assets (€9m) > Increase in 2014 due to positive effects from compensation payments for delays to the completion of Nordsee Ost. This was offset by drastic cuts made by the Spanish government to renewable energy subsidies granted, decreasing power prices and lower volumes from existing assets > Higher D&A in 2015 resulting from increase in overall asset base due to the commissioning of Nordsee Ost and Gwynt y Môr Capex > Significant decrease from 2013 to 2015 mainly driven by the completion of Nordsee Ost and Gwynt y Môr € million 2013 2014 2015

EBITDA 448 524 818 t/o operating income from investments (44) (3) 102 Operating D&A (248) (271) (330) Operating result 200 253 488 Capex¹ 975 677 404 Capex/operating D&A 3.9x 2.5x 1.2x EBITDA – capex (527) (153) 414

Financials

slide-39
SLIDE 39

page 37 innogy · company presentation · 1 August 2016

P&L summary (1/2) – strong and steadily increasing EBITDA

innogy Group Comments

EBITDA development > 2015 EBITDA affected by strong increase in Renewables, Retail Germany and G&I East, partly offset by a decline in Retail UK and G&I Germany > Stable net income contribution to EBITDA from investments accounted for using the equity method as well as other income from investments > Non-operating result, amongst other things, includes book gains or losses from the disposal of investments or non- current assets not required for operations, impairments as well as effects of the fair valuation of certain derivatives

  • 2013: largely affected by impairments related to Spanish

wind farms, primarily due to the government decision to retrospectively cut renewable energy subsidies

  • 2015: largely affected by impairments related to the IT

infrastructure in Retail UK € million 2013 2014 2015

EBITDA 4,194 4,297 4,521 t/o operating income from investments 263 306 415 Operating depreciation, amortisation and impairment losses (1,350) (1,438) (1,471) Operating result 2,844 2,859 3,050 Non-operating result (832) (83) 50 t/o impairments (799)

  • (167)

t/o restructuring (315) (103) 15 t/o disposals 211 33 65 t/o mtm derivatives 24 (14) 135 t/o other 47 1 2

Financials

slide-40
SLIDE 40

page 38 innogy · company presentation · 1 August 2016

P&L summary (2/2) – historical financial result and tax not representative of innogy’s future set-up

innogy Group Comments

> Financial result not representative of future capital structure given assumptions behind combined financial statements (CFS)

  • In addition, 2016E financial result will be affected by amortisation of

fair value 'step-up'1 > Financial income in 2015 includes €279m gains from disposal of marketable securities held by regional majority participations > Effective tax rate not representative for going concern given CFS did not take into account tax groups, e.g. for offsetting purposes. Other effects:

  • 2013 taxes includes €(144)m effects from the non-usability of

certain tax loss carry-forwards

  • 2015 taxes includes €(258)m effects from non-deductible expenses,

e.g. transfer of loans, and €95m effects from non-taxable income, e.g. tax-free gains from disposal of marketable securities > 2015 increase in non-controlling interest driven by both structural and

  • ne-off effects:
  • Macquarie increasing stake in RWE Grid Holding, a.s. by 15%
  • One-off income from disposal of marketable securities by non-100%
  • wned German regional utilities (>€50m vs. 2014; pre-tax)

> Given limitation above, net income is not representative of going concern net earnings level of the innogy Group € million 2013 2014 2015

Financial result (567) (555) (302) t/o financial income 406 445 578 t/o financial costs (973) (1,000) (880) Income from continuing

  • perations

1,445 2,221 2,798 Taxes on income (551) (523) (860) Effective tax rate 38.1 % 23.5 % 30.7 % Income 894 1,698 1,938 t/o non-controlling interest 230 231 325 t/o one-off effects in non- controlling interest >502 Net income 664 1,467 1,613

1 Refers to bonds transferred from Finance BV and Finance BV II. 2 Pre tax.

Financials

slide-41
SLIDE 41

page 39 innogy · company presentation · 1 August 2016

1 Relevant for adjusted net income.

Financials

> Historic tax rate not representative > 2016 tax rate will be significantly impacted by one-offs due to the ongoing restructuring – to be adjusted in the adjusted net income > Going forward, innogy expects a normalised tax rate within the range of 25%-30% > Expected cash tax rate of 20%-25% due to use of deferred tax assets related to the foundation of innogy € million 2013 2014 2015

Taxes on income (551) (523) (860) Effective tax rate 38.1 % 23.5 % 30.7 % Statutory tax rate for innogy tax group 31% 31% 31% Germany 31% 31% 31% UK 23% 21% 20% NL 25% 25% 25% East ~23% ~24% ~24%

~25%-30% normalised tax rate1 Comments innogy Group

innogy’s normalised tax rate in the order of 25-30%

slide-42
SLIDE 42

page 40 innogy · company presentation · 1 August 2016

innogy’s capital structure – next steps to reach leverage target

Note: further effects may have an impact on net debt. 1 Refers to bonds transferred from Finance BV and Finance BV II. 2 Post money.

Financials

~4.0x net debt/ EBITDA

Net debt H1 2016 Cash contribution and D/E swap in July 2016 IPO proceeds

> H1 capitalisation reflective

  • f all relevant intercompany

transactions related to formation of innogy incl. purchase price payments for transferred assets > €0.9bn cash capital contribution used for intercompany debt repayment > Debt/equity swap of ~€1.0bn > ~10%2 primary capital increase at IPO

2 3 Leverage target

Net debt 2015

4 1

> External senior bonds transferred to innogy from RWE AG (€11.3bn)¹ > Intercompany receivables and payables not reflective

  • f innogy‘s capital structure
slide-43
SLIDE 43

page 41 innogy · company presentation · 1 August 2016

innogy net debt composition and impact of the envisaged IPO

Financials

1 Excluding effects from operating cash flow as well as FX-related changes. 2 Post money. 3 Also includes non-current securities (€26m). 4 Financial receivables adjusted for €0.2bn of loans against associates and unconsolidated

  • subsidiaries. 5 Netting effects may occur. 6 Corresponding effects reflected in other financial assets. 7 Includes hedge transactions related to bonds.

Net debt item 31 Dec 2015 (€ bn) Changes in H1 20161 Changes in Jul 20161 Impact from IPO

Cash & cash equivalents 0.6 No significant changes No significant changes + ~10%2 primary capital increase at IPO Marketable securities 1.93 Potential valuation changes Potential valuation changes

  • Other financial assets

12.44 Transaction driven changes No major changes expected5

  • Financial assets

14.94 Bonds and bank debt 12.9 ./. €850m bond repayment in April 20166 No changes expected

  • Adjustment for 'step-up' of bonds

to market values (1.2) Amortisation of 'step-up' over maturity of bonds Amortisation of 'step-up' over maturity of bonds

  • Other financial liabilities incl.

intercompany loans7 6.1 Transaction driven changes ./. ~€1bn debt/equity swap ./. €0.9bn IC debt repayment

  • Financial liabilities7

17.7 Provisions for pensions and similar obligations 3.5 Change in discount rate Change in discount rate

  • Provisions for wind farm

decommissioning 0.3 No significant changes No significant changes

  • Net debt (B - A + C + D)

Increase in net debt Reduction in net debt Reduction in net debt 2 3 4 1 A B C D

5

slide-44
SLIDE 44

page 42 innogy · company presentation · 1 August 2016

€11.3bn €1.2bn 2015¹ 2016 2017 …

Fair value 'step-up' of bonds leads to lower book interest expenses – yet no change on cash interest level

1 As of 31 Dec 2015. 2 Respective dates of initial recognition in innogy’s balance sheet.

Financials IFRS B/S value of bonds P&L interest costs of bonds

> Book interest expense reduced by positive book effect from amortisation of 'step-up' over time (to be shown within 'interest and similar expenses') > Positive effect on net interest expense reversed in adjusted net income

Fair value 'step-up' of bonds transferred to innogy with impact on…

> 'Step-up' resulting from debt transfer transaction > Book (as per RWE IFRS B/S) to market value as per 18 Dec 2015/28 Dec 20152 > No impact on repayment value

Senior bonds 'step-up'

2016 (gross) Amortisation of 'step-up' 2016 (net)

Amortisation of 'step-up' ~5% avg. interest ~3% avg. P&L interest

Cash interest costs of bonds

> innogy‘s cash interest equivalent to contractual coupons identical to RWE AG in the past

2016

~5% avg. cash interest Amortisation over maturity of bonds

slide-45
SLIDE 45

page 43 innogy · company presentation · 1 August 2016

Strong cash generation with a CFOA/EBITDA

  • f around 70% post tax on average

Financials

Note: rounding differences may occur. 1 Capex on intangible assets, property, plant and equipment, excluding financial investments.

€ billion 2013 2014 2015 EBITDA 4.2 4.3 4.5 Funds from operations (FFO) 3.3 2.9 2.5 Changes in working capital 0.3 0.1 0.2 Cash flows from operating activities (CFOA) 3.7 3.0 2.8 Capex1 (2.3) (2.1) (2.0) Free cash flow 1.4 0.9 0.7

Comments

> Delta EBITDA vs. FFO mainly related to book gains in EBITDA related to sale of assets and delta between use and build-up of provisions in 2015 (€0.4bn), 2014 (€0.4bn) and 2013 (€0.0bn) > Funds from operations (FFO) declines among others due to

  • Higher temporary use vs. build-up of provisions in particular

pension and personnel provisions in 2015 (€0.4bn), and 2014 (€0.2bn), in 2013 balanced use and build-up of pensions and personnel provisions

  • Temporary increase in cash tax in particular in 2015 vs. 2014

(€0.3bn), partly driven by one-offs related to debt transfer from RWE to innogy > Working capital with low volatility in absolute terms

  • Some one-off effects between 2014 and 2013, mainly related

to a y-o-y tax related shift in NL/BE (€0.2bn) > Lower capex mainly in Renewables after finalisation of major investment projects (Nordsee Ost and Gwynt y Môr)

innogy Group

slide-46
SLIDE 46

page 44 innogy · company presentation · 1 August 2016

Financial discipline and strict investment criteria – foundation for growing shareholder value

Note: rounding differences may occur. 1 Including financial investments. Pie charts do not include ~€0.2bn of centrally accounted capex mainly for innovation projects. 2 Hurdle rates = after-tax WACC + project risk adjustment + country risk adjustment.

Financials

5%-7% 7%-8% 5%-8%

core business

5%-15%

new markets/new technologies

Grid & Infrastructure Retail Renewables

> ‘Green’ investments in grid infrastructure driven by energy transition in Germany > ‘Smart’ maintenance driven by digitalisation > Growth in selected markets > Market entry in adjacent markets > ‘Smart’ investments in technologies partly backed by public grants > ‘New products’ driven by changing role of consumers > Execute current pipeline mainly in wind > Existing technologies in new markets > New technology: utility-scale solar Investment focus ROI hurdle rates2

~€6.5bn planned capex1 2016-2018E

~€4.1bn ~€1.3bn ~€0.8bn Indicative capex split 2016-2018E

slide-47
SLIDE 47

page 45 innogy · company presentation · 1 August 2016

Financial year EBITDA Comments

2015A €4.5bn 2016F €4.1bn – €4.4bn 2017F €4.3bn – €4.7bn

Financial outlook 2016 and 2017

Financials

Higher operating and maintenance costs in German distribution network business Absence of positive effects, e.g. gain on disposals and release of provisions Operational improvement in UK Retail operations Lower cost base for G&I Germany Slight EBITDA improvement from new efficiency programme Gross cost savings in UK Retail in line with targets of recovery programme Gains from disposals of offshore wind parks and grid assets Effects related to regulatory and billing issues in the UK retail business Gains from first-time consolidation effects and release of provisions Higher utilisation of installed renewables capacity and addition of capacity, partly offset by lower average revenue per MWh

slide-48
SLIDE 48

page 46 innogy · company presentation · 1 August 2016

> Higher operating and maintenance costs in German distribution network business > Lower income from grid sales > Stable allowed returns on RAB due to largely unchanged regulatory regimes > Stable income from investments in Germany > Stable contribution from other business, mainly gas storage and quasi-regulated water business

Financial outlook: key assumptions for G&I

Financials

EBITDA 2015 Actual €2,878m EBITDA 2016

> Slight increase in WACC in CZ > Book gain from revaluation after first- time consolidation of VSE Slovakia (€143m) > High income from grid sales (€153m)

Forecast €2.5bn – €2.7bn

slide-49
SLIDE 49

page 47 innogy · company presentation · 1 August 2016

Financial outlook: key assumptions for Retail

Financials

EBITDA 2015

> Slight decrease in operational expenditures, also due to continued efficiency efforts > Operational improvement in UK from organisational measures, cost reduction and customer retention measures > Release of provisions for legal risks in Germany (€81m) > Book gain from revaluation in relation to first-time full consolidation of our Slovakian participation VSE in East (€42m) > Impacts from billing and regulatory issues in UK (-€119m1) > Customer losses in UK and NL, to a large extent offset by customer growth initiatives in other markets

1 Includes (i) net effects of €60m related to charges concerning erroneous and late invoicing, the build-up of provisions for regulatory charges and reviews and the release of provisions for customer paybacks and (ii) net effects of €59m related to billing issues due to changes in revenue estimation.

EBITDA 2016 Forecast €1.0bn – €1.2bn Actual € 988m

slide-50
SLIDE 50

page 48 innogy · company presentation · 1 August 2016

Financial outlook: key assumptions for Renewables

Financials

EBITDA 2015 Forecast €0.6bn – €0.8bn

> Slight increase in generation volumes: Nordsee Ost and Gwynt y Môr contributing for full year 2016 > Better hydrological conditions > Gain on disposals of stakes in Galloper, Gwynt y Môr and Triton Knoll (€132m) > Income from Nordsee Ost claims (€12m) > Losses from UK development projects (-€27m) > Lower wind conditions > Lower wholesale prices, expected end of subsidies (NL), lower values

  • f LECs (UK), lower prices for green certificates (POL)

> Negative effects from GBP/EUR FX > Slight increase in operational expenditures driven by higher installed capacity

Actual € 818m EBITDA 2016

slide-51
SLIDE 51

page 49 innogy · company presentation · 1 August 2016

Financial outlook: summary

Financials

Segment 2015 EBITDA actual (€bn) 2016 EBITDA forecast (€bn) 2017 EBITDA forecast (€bn)

Grid & Infrastructure 2.9 2.5 – 2.7 – Retail 1.0 1.0 – 1.2 – Renewables 0.8 0.6 – 0.8 –

innogy Group1 4.5 4.1 – 4.4 4.3 – 4.7

1 Including ‘Other, consolidation’.

slide-52
SLIDE 52

page 50 innogy · company presentation · 1 August 2016

innogy – definition of adjusted net income as basis for dividend payout ratio

Financials Reported EBITDA1

  • Operational D&A
  • Adjusted net interest
  • Taxes

Adjusted net income Dividends €4.1bn – €4.4bn 2016F EBITDA and €4.3bn – €4.7bn 2017F EBITDA Operational D&A as % EBITDA in line with historical levels P&L interest costs adjusted for effect from amortisation of 'step-up' of bonds 25%-30% normalised tax rate Net income adjusted for innogy IPO one-off costs and delta between P&L and cash gross financial debt interest costs 70%-80% based on adjusted net income

1 EBITDA before one-off costs related to the IPO of innogy which are included in non-operating result only and are added back for the purposes of adjusted net income calculation.

slide-53
SLIDE 53

page 51 innogy · company presentation · 1 August 2016

1 2 3

EBITDA forecast Stable and highly regulated earnings Strong cash generation and solid capital structure Shareholder value creation

1 Includes regulated and quasi-regulated business activities.

Financials

~60%

share of regulated1 EBITDA

~70%

CFOA/EBITDA (average 2013-15)

~4.0x

target leverage net debt/EBITDA

>[95]%

Efficiency factor in Germany

Strong Development of SAIDI / SAIFI rates

Among DSOs in Eastern Markets3

70-80%

dividend pay-out ratio based on adjusted net income

Strict capital discipline

4

€4.1bn – €4.4bn 2016F EBITDA €4.3bn – €4.7bn 2017F EBITDA

innogy’s financial profile – four takeaways

slide-54
SLIDE 54

Grid & Infrastructure Overview

slide-55
SLIDE 55

page 53 innogy · company presentation · 1 August 2016

Grid & Infrastructure at a glance

Grid & Infrastructure Grid & Infra- structure

Highly predictable, regulated earnings contribution Attractive growth opportunities A leading European distribution grid operator1 Strong development of €13.3bn RAB2 with 9% RAB increase2 expected for Germany and 9% historic RAB growth in Eastern Europe3

1 Based on distributed volume. 2 Regulated asset base. Numbers based on latest notification by regulator or based on calculations in latest filings with regulators. Expected increase in German regulated asset base calculated as RAB 2010/2011 plus net investments (post concession gains/losses) in regulated assets in the years 2010/2011 to 2015/2016E, assuming full recognition by the regulator. Generally, RABs from different regulatory regimes are not directly comparable due to significant methodological differences (e.g. regulatory periods, regulatory depreciation periods). Throughout this presentation, the RAB relevant for the 2015 tariff figure is used. Also, throughout this presentation, RABs are always stated excluding pro-rata share of RAB from participations that are not fully consolidated. 3 Historic increase in regulated asset base for Eastern European countries calculated as RAB relevant for tariff in 2015 vs. RAB relevant for tariff in 2011 (in € at constant 2011 year-end exchange rates) for Czech Republic, Hungary and Poland. Growth rate excludes Slovakia as RAB was introduced in 2012 only and RAB will only be adjusted in next regulatory period starting 2017. Including FX effects, RAB would have increased by ~7%.

slide-56
SLIDE 56

page 54 innogy · company presentation · 1 August 2016

Distributed volume (GWh) 142,000 73,000 66,500 16,800 7,200 3,700 Grid customers (m)4 9.3 1.0 2.3 2.3 1.0 0.6 Grid area (‘000 km²) 92 35 46 20 0.5 16 Grid length (‘000 km)5 356 47 65 67 17 22 RAB1 €9.7bn €1.6bn €0.9bn €0.7bn €0.5bn Country rating6 AAA A1 Ba1 A2 A2

A leading European distribution grid operator anchored in Germany

Grid & Infrastructure

GER

#1

gas DSO Czech Republic3

Gas Electricity

GER CZ HU PL SK

GER PL HU SK CZ

+9% increase

expected for RAB1 Germany

€13.3bn

regulated asset base1

#1

electricity DSO in Germany3

+9% increase

2011-’15 for RAB2 East

Note: all figures (except for RAB) as per 2015. Rounding differences may occur. 1 Regulated asset base. Numbers based on latest notification by regulator or based on calculations in latest filings with regulators. Expected increase in German regulated asset base calculated as RAB 2010/2011 plus net investments (post concession gains/losses) in regulated assets in the years 2010/2011 to 2015/2016E, assuming full recognition by the regulator. Generally, RABs from different regulatory regimes are not directly comparable due to significant methodological differences (e.g. regulatory periods, regulatory depreciation periods). Throughout this presentation, the RAB relevant for the 2015 tariff figure is used. Also, throughout this presentation, RABs are always stated excluding pro-rata share of RAB from participations that are not fully consolidated. 2 Historic increase in regulated asset base for Eastern countries calculated as RAB relevant for tariff in 2015 vs. RAB relevant for tariff in 2011 (in € at constant 2011 year-end exchange rates) for Czech Republic, Hungary and Poland. Growth rate excludes Slovakia as RAB was introduced in 2012 only and RAB will only be adjusted in next regulatory period starting 2017. Including FX effects, RAB would have increased by ~7%. 3 Based on distributed volume. 4 Grid customers are defined as supplied delivery points. 5 Based on operated grid. 6 Source: Moody’s.

slide-57
SLIDE 57

page 55 innogy · company presentation · 1 August 2016

1 Segment breakdown based on sum of operating segment (€4.7bn). Total includes €(0.2)bn presented as ‘Other, consolidation’ in the combined financial statements. Numbers might not add up due to rounding differences. 2 In terms of distributed volume. As of 2015.

G&I with largely regulated and predictable earnings accounting for over 60% of innogy Group EBITDA

Grid & Infrastructure

G&I within innogy By regulated business

Share of regulated business >80%

By area By geography

East ~30% Germany ~70% Fully consolidated Partici- pations Other Grid

  • No. 1 electricity DSO in Germany²

Strong track record of profitable growth in Eastern Europe High share of regulated business

2015 EBITDA €2.9bn

  

61% 21% 17% innogy EBITDA 2015 Renewables Retail Grid & Infrastructure €4.5bn

1

slide-58
SLIDE 58

page 56 innogy · company presentation · 1 August 2016

1 Capex including financial investments. Includes non-grid capex. 2 Regulated asset base. Expected increase in German regulated asset base calculated as RAB 2010/2011 plus net investments (post concession gains/losses) in regulated assets in the years 2010/2011 to 2015/2016E, assuming full recognition by the regulator. 3 Historic increase in regulated asset base for Eastern European countries calculated as RAB relevant for tariff in 2015 vs. RAB relevant for tariff in 2011 (in € at constant 2011 year-end exchange rates) for Czech Republic, Hungary and Poland. Growth rate excludes Slovakia as RAB was introduced in 2012 only and RAB will only be adjusted in next regulatory period starting 2017. Including FX effects, RAB would have increased by ~7%.

Capex above depreciation resulting in RAB growth

Grid & Infrastructure

Development of regulatory asset base (€bn) Capex breakdown 2016-18E¹

> Majority of capex will be invested in Germany, increasingly for ‘Energiewende’ investments > Eastern European capex used mainly for ‘conventional’ grid expansion and new customer connections > Capex continuously above regulatory depreciation over 2011-2015 > Resulting RAB growth to support regulated profits

25% East 75% Germany RAB 2010/11 Cumulated regulatory depreciation Cumulated capex RAB 2015/16

+9%

expected increase for 2010/11-2015/16 RAB Germany2

+9%

historic increase for 2011-2015 RAB East3

Total ~€4.1bn

slide-59
SLIDE 59

page 57 innogy · company presentation · 1 August 2016

1 Numbers based on latest notification by regulator or based on calculations in latest filings with regulators. Expected increase in German regulated asset base calculated as RAB 2010/2011 plus net investments (post concession gains/losses) in regulated assets in the years 2010/2011 to 2015/2016E, assuming full recognition by the regulator. Throughout this presentation, RABs are always stated excluding pro-rata share of RAB from participations that are not fully consolidated. 2 Based on distributed volume. Source: RWE, E.ON, EnBW, EWE. Data as of 2015 (except for some EnBW-DSOs which are based on 2014). 3 Based on distributed volume. 4 Not fully consolidated municipal

  • utilities. 5 Based on operated grid. 6 Grid customers are defined as supplied delivery points. 7 BNetzA, Monitoring report 2015. 8 Federal Ministry for Economic Affairs and Energy, website, as of 8 Jun 2016.

Germany – #1 electricity DSO with strong market position in industrial centres

Grid & Infrastructure – Germany

Grid & participations overview innogy key statistics

Electricity Gas

Grid length (‘000 km)5 356 47 Grid customers6 9.3m 1.0m

Distribution network; area: electricity, natural gas and water activities of innogy in Germany

Ranking of German electricity and gas DSOs2

Electricity Gas

#1 #2 #3

Total DSOs (#) ~9007 ~7008

>100

municipal participations4

#1

electricity DSO in Germany2

+9% increase

expected for German RAB¹

A leading gas DSO3

€9.7bn

regulated asset base1

>10m

grid customers

Frankfurt Stuttgart Munich Saarbruecken Dortmund Chemnitz Essen Wiesbaden Cologne Mainz Augsburg Hanover Hamburg Berlin Dresden

slide-60
SLIDE 60

page 58 innogy · company presentation · 1 August 2016

State-of-the-art asset base with #1 positions by volume & load in Germany

Source: Webpages of individual DSOs of the following companies: RWE, E.ON, EnBW, EWE. 1 Data as of 2015 (except for some EnBW-DSOs, which are based on 2014).

Grid & Infrastructure – Germany

Grid length (‘000 km)

Electricity distribution grid1

Grid length (‘000 km)

Gas distribution grid1

Volumes (TWh) Volumes (TWh) Network load (GW) Network load (GW)

142 116 60 innogy E.ON EnBW 22 16 10 innogy E.ON EnBW 356 347 137 innogy E.ON EnBW 22 20 11 innogy E.ON EWE 47 56 55 E.ON EWE innogy 73 73 41 E.ON innogy EWE

#1 #1 #1 #3 #1 #2

slide-61
SLIDE 61

page 59 innogy · company presentation · 1 August 2016

> Exploit operational synergies from scale of business and best- practice transfer > Drive efficiency via further digitalisation and process optimisation

Clear strategic imperatives – efficiency and capitalising on regulatory expertise to drive earnings growth

Grid & Infrastructure

> Stable regulatory framework leads to predictable earnings > Close interaction with regulators as proven way to prepare for regulatory change > Optimised capex strategy for sustained earnings growth across markets > Anticipate changing role of DSO and benefit from new business models > Small-scale acquisitions

Business development C Regulatory management A Operational excellence B

slide-62
SLIDE 62

page 60 innogy · company presentation · 1 August 2016

High level of experience through long-term involvement in German regulation

Grid & Infrastructure – Germany

A

> Timeline for electricity to be read as follows: in 2017, assessment of costs of year 2016 (base year) for benchmarking in 2018, beginning of 3rd regulatory period in 2019 > Gas and electricity with different timelines to relieve the process of cost assessment Efficiency benchmarking for 2nd period '06 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 Incentive regulation – 1st period Cost assessment for 2nd period Incentive regulation – 2nd period Cost assessment for 3rd period Efficiency benchmarking for 3rd period Incentive regulation – 3rd period '21 '22 '23 '24 '19 '20

Gas

base year for the 3rd regulation period

Electricity

base year for the 3rd regulation period

Beginning of incentive regulation Base year for the 1st regulation period

slide-63
SLIDE 63

page 61 innogy · company presentation · 1 August 2016

German incentive regulation – a mature and stable system

Grid & Infrastructure – Germany

Cornerstones of German network regulation Current discussion on regulatory review for 3rd regulatory period

Elimination of time-lag for investments Bonus for most efficient DSOs Setting of new imputed return on equity Adjustment of productivity development Ex-ante revenue cap regulation Cost recognition based on actual DSO’s cost base RAB remuneration determined for entire regulatory period Remuneration mechanism for grid expansion

A

slide-64
SLIDE 64

page 62 innogy · company presentation · 1 August 2016

1 Concession renewals based on inhabitants supplied, taking into account exercise of early cancellation options. Chart indicates concessions up for renewal within respective time period, excluding water concessions. 2 Based on inhabitants supplied. 9-year weighted average takes early cancellation options into account. 12-year weighted average excl. early cancellation options. 3 Applies to high voltage, certain regional-based medium voltage grids as well as to high pressure gas grids. Based on 2010/11 RAB in Germany. 4 (revised) Including electricity, gas and water concessions, including consessions held by our grid participations. As of 30 June 2016. 5 Refers to grid participations for which an innogy entity is the grid operator.

Recent ‘wave’ of concession renewals successfully accomplished – more certainty

Grid & Infrastructure – Germany

> During the last 5 years (2011-2015), innogy has experienced a ‘wave’ of concession renewal processes > innogy has successfully renewed or transferred to grid participations

  • approx. 90% of its expiring concessions over the last 5 years

> In case of lost concessions, forced grid sale still offers potential for attractive remuneration of current asset base and investments > Fewer upcoming concession renewals in the mid-term > Tender proceedings are based on quality factors > innogy’s advantages are, among others, relationship management in existing concession contracts and fast technical solutions

A innogy’s existing concessions

Concession- based RAB ~2/3 Non- concession- based RAB3 ~1/3

Strong portfolio of ~3,800 concessions4 Fully consolidated entities account for 94%, participations5 for further 6% of total concessions ~1/3 of German RAB not based on concessions3, thus providing further earnings stability   

Overview of concession renewals¹

9-12 years

weighted average concession duration2

~65% 0% 25% 50% 75%

2011 - 2015 2016E-2020E 2021E-2025E 2026E-2030E >2031E

slide-65
SLIDE 65

page 63 innogy · company presentation · 1 August 2016

20 40 60

G&I with superior operational performance and high quality assets supporting sustainable performance

Source: Polynomics AG, 2013. Note: representative subset of 130 major grid operators (out of 196). Grid operators not participating in benchmarking mostly small grid operators. 1 Costs used in regulatory benchmarking process. Outliers graphically cropped. Average excluding outliers. 2 High voltage benchmarking relates to 110kV grids only. 3 Based on 2016E forecast data.

Grid & Infrastructure – Germany

B Typical costs of a grid operator Cost benchmarking illustrates innogy‘s industry- leading position

 Transparent maintenance and renewal strategy based

  • n technically feasible lifetimes and relevant risk aspects

 Efficient and effective processes, e.g. automated workforce management  Combined investment strategy addressing technical and regulatory perspectives

Exemplary split for innogy‘s Westnetz3 Distribution lines Substations Connecting points

200 400 600 800 1.000 1.200 1.000 2.000 3.000 4.000

40,000 3,000 2,000 1,000

Costs per high voltage grid length (€’000s/km)1,2 Costs per connecting points (€)¹ Costs per substation (€’000s)¹

innogy grids, benchmarking of 130 grid operators median costs innogy entities innogy entities innogy entities

Other

1,000 600 800 400 200 1,200

slide-66
SLIDE 66

page 64 innogy · company presentation · 1 August 2016

Before After Before After Before After

Smart replacement investments – further enhancing

  • perational performance and RAB development

1 Optimisation example of a medium voltage distribution grid. 2 Degree of cabling = underground cables/total grid length.

Grid & Infrastructure – Germany

Optimisation of distribution grids1… …leading to increased operational efficiency and reduced O&M costs

Constantly improving operational performance through smart replacement capex

Grid length (km) Switchgears (#) Degree of cabling2 (%) Improvement of operating metrics

Before After investments O&M costs Optimisation of

  

B

slide-67
SLIDE 67

page 65 innogy · company presentation · 1 August 2016

German ‘Energiewende’ opens up significant growth

  • pportunities for distribution grids

1 Source: AGEE/BMWi. 2 Source: BMUB, BMWI. 3 Source: European Commission. Excluding pump storage hydro generation.

Grid & Infrastructure – Germany

Renewables have transformed the German energy landscape… …driven by a strong political will to decarbonise the economy…2 …which will continue to drive the expansion of renewables

Thermal electricity generation from CHP in 2020 25% 1.5% 40% 80% Annual decrease in total energy consumption from 2014 to 2020 Reduction of greenhouse gas emissions until 2020 (compared to 1990) Share of electricity demand to be covered by renewables until 2050

C

20 40 60 80 100 2000 2005 2010 2015 Hydro Wind onshore Wind offshore Solar PV Biomass Other Installed capacity from renewables (GW)¹ 11 180 2000 2050 Total RES capacity installed (GW)³

CAGR 5.7%

slide-68
SLIDE 68

page 66 innogy · company presentation · 1 August 2016 0% 20% 40% 60% 80% 100%

1 2 3 4 5 6 7 8 9

Westnetz Peer 1 Mitnetz Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 LEW Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 Peer 14 Peer 15 Peer 16 Peer 17 Peer 18 Syna Peer 19 Peer 20 Peer 21 Cumulated share Installed capacity (GW) innogy companies Other Cumulated share

25 largest network operators in terms of integrated decentral RES capacity¹

1 Source: EnergyMap.info; largest German network operators in terms of integrated decentral RES capacity as of August 2015. 2 Source: Verteilernetzstudie BMWi

Grid & Infrastructure – Germany > In total, 90%2 of RES capacity is connected to the distribution grid in Germany > With continued growth in RES capacities, DSOs will play a central role in integrating and coordinating the transition towards renewables > innogy is well positioned and at the forefront of this development – already among the leading integrators of installed decentral RES capacity

C ‘Energiewende’ mainly takes place at DSO level…

slide-69
SLIDE 69

page 67 innogy · company presentation · 1 August 2016 28.7 2016

‘Energiewende’ - grid expansion

Conventional expansion Innovative expansion

Electricity cost breakdown¹ Expected Ø investments/costs and technical

  • ptions2

Development of electricity prices (ct/kWh)3

1.3 1.1 1.0 Conventional grid expansion Advanced energy curtailment⁴ Controllable grid devices⁵ (15)% (20)%

…requiring DSOs to develop intelligent solutions

Grid & Infrastructure – Germany > Network costs form a substantial part of electricity prices > Investment needs in distribution grids of €23-49bn until 20322 further opportunity for RAB growth > Political focus to maintain affordable level of power prices > Tackling ‘Energiewende’-related investments requires efficient and innovative grid solutions > Development of innovative solutions reduces

  • verall investment needs by up to 20%

> As a trusted partner with industry-leading know-how and innovation power, innogy is well positioned to manage the ‘Energiewende’

€bn p.a.

C

Taxes, levies and fees 54% Supply 21% Grid fees 25%

1 Source: German Energy and Water Association, May 2016; Cost breakdown of electricity for household customers – annual consumption of ca. 3,500 kWh. 2 Source: ‘Moderne Verteilernetze für Deutschland’ (Verteilernetzstudie) – study for the German Ministry of Economics and Energy (BMWi). Investment needs from 2014-2032 assuming conventional grid expansion. 3 Source: German Energy and Water Association, May 2016; Development of electricity prices for household customers (ct/kWh) incl. taxes, levies and fees; annual consumption of ca. 3,500kWh. 4 Curtailment occurs when power output must be shut down in order to balance the grid. Advanced energy curtailment seeks to minimise the resulting economic losses. 5 Controllable grid devices seek to actively address and manage changes in electric frequency due to changes in supply or demand, resulting in less system interruptions as well as adjustments of load depending on current electricity prices.

slide-70
SLIDE 70

page 68 innogy · company presentation · 1 August 2016

Real life examples – innogy enables the ‘Energiewende’ by expanding grid architecture and integrating RES

1 Example refers to area of Büren, Germany. 2 Currently under construction.

C

€20m of grid expansion projects (110kV) implemented/being implemented in local area since 2011 €13m of additional grid expansion projects in pipeline (110kV) innogy’s grid business with its continuous investments is the enabler of ‘Energiewende’ Investments increase regulated asset base and will remain of high operational value to avoid grid flow bottlenecks   innogy’s network service business is very successful at integrating third-party RES sources to distribution grid: Example: windfarm Heidenrod > Building and connection of 12 wind power stations within ~½ year > Supplied households: 26,000 Example: solar park Pferdsfeld2 > innogy to connect 28MW of generation capacity > Supplied households: 7,000 

Bestwig Ludwigstr. An der Bremecke Brilon Brilon Accu Messinghausen Bredelar Nehden WEPA Giershage n WP Kohlgrund 1 WP Kohlgrund 2 Marsberg Marsberg WP Neudorf Erwitte Geseke Dyckerhoff SA Milke WP Oberfeld WP Weiberg Büren Büren Rüthen Rüthen Anneliese WP Madfeld WP Empertal WP Vierlinden WP Hohenroden WP Wewelsburg Wünnenberg WP Meerhof Husen Lichtenau WP Hakenberg Bad Wünnenberg WP Altenautal WP Adorf WP Radlinghausen WP Hölter Berg WP Wehlühgel Müscheder Weg

Substation Wind park Investments 2011-2015 Project pipeline 2016ff Existing before ‘Energiewende’

Grid expansion1 Third-party RES integration

Grid & Infrastructure – Germany

slide-71
SLIDE 71

page 69 innogy · company presentation · 1 August 2016

> ‘Energiewende’ - increasing RES feed-in leading to volatile grid flows > Intelligent solution in the low voltage grid – alternative to conventional expansion > Smart Operator communicates with feed-in sources and consumers and collects data > Improves forecast of grid load and capacity can then be used to balance supply/demand, i.e. by using household appliances at RES peak feed-in times > Improved grid planning, transparency and cost effectiveness > Smart country ensures supply of rural areas in times of increasingly decentralised energy > Voltage stability mechanism reducing need for grid expansion with mechanisms such as storage for feed-in balancing, supply/demand analysis technology and more resilient voltage controllers > Roll-out mostly in small rural municipalities, where energy supply is forecasted to exceed demand by 2030 > Received top award and funding by the German Ministry of Economics and Energy Tangible innovative solutions   Constantly lifting controllable cost efficiencies  Leveraging ‘Energiewende’ know-how

Intelligent meter Photovoltaic Appliances Hot water Home energy controller Smart

  • perator

Biogas Biogas storage CHP Photovoltaic systems Voltage controller Windfarm

innogy is a clear innovation leader in its field

C Example project ‘Smart Operator’ Example project ‘Smart Country’

Grid & Infrastructure – Germany

slide-72
SLIDE 72

page 70 innogy · company presentation · 1 August 2016

Replacement

> Optimisation of existing distribution grid through smart replacement capex > Increases operational efficiency and reduces O&M costs

‘Energiewende’ investments

> Integration of renewables capacity > Smart technology driven by digitalisation > Innovative solutions for grid expansion

Customer connections

> New customer connections

Increased focus on ‘Energiewende’ investments reflected in capex spend

1 Capex including financial investments. 2 Other grid capex includes investment for non-regulated grid assets such as street lighting, broadband or telco activities. 3 Non-grid capex comprises of capex for innogy’s German storage facilities, shares of investment spend related to participations as well as capex for other activities, such as innogy’s water business.

Grid & Infrastructure – Germany

Capex breakdown¹ C

~€3.1bn of investments 2016-18E will continue to support growth in Germany

Replacement 34% ‘Energiewende’ investments 16% Customer connections 19% Other grid capex 13%2 Non-grid capex 18%3

2016-18E total capex G&I Germany ~€3.1bn1

slide-73
SLIDE 73

page 71 innogy · company presentation · 1 August 2016

Participations – strategic partnerships with municipal utilities as key competitive advantage

Note: largest participations by contribution to G&I income from investments (adjusting for income/losses from loans to other group entities, gains/losses from sale of investments and other components). 1 Not fully consolidated regional or municipal utilities. 2 As per innogy’s combined financial statements. Top municipal 5 participations based on at-equity income contributions shown. Does not include Austrian Kelag with income from investments of €32m. 3 In FY2015.

Grid & Infrastructure – Germany

> Partnerships mainly with municipal utilities extend innogy’s regional coverage across Germany > Participations provide regional identification and customer proximity > Strategic advantage for innogy also in minority participations through its frequent role as service provider > Synergies in the area of testing, developing and rolling out new business models > Best practices and economies of scale in areas such as procurement, risk management and other > >100 municipal participations1

Participations as integral component of G&I Selected municipal participations2

Participation innogy share2 Income from investments3

20% 27 40% 15 50% 12 43% 7 27% 7

slide-74
SLIDE 74

page 72 innogy · company presentation · 1 August 2016

‘Other’ business – supplemental utility businesses strengthening local footprint

1 As of 30 Jun 2016. 2 RWE Gasspeicher benchmarking, estimates based on publicly available data and market intelligence. Excluding storage facility for which closure has been initiated. 3 innogy has other minor water supply business activities beside RWW. 4 Source: Umwelterklärung RWW 2015. 5 Source: company information, as per Annual Report 2015. 6 Source: company information. For fiscal year 2015. Revised.

Grid & Infrastructure – Germany/East

Generation Water supply

Indicative split of €0.3bn G&I EBITDA 2015A from Other ~75m m³ water supplied in 2015 (RWW)3 ~3,000km grid length4

TelCo, service and other activities

TelCo service provider Some subsidiaries providing wide range of B2B/B2C TelCo products and services Other services Energy data management and services facility management, street lighting ~800 MW installed capacity Conventional Generation6 Coal, gas and oil. ~800GWh LEW electricity production from renewables5

Gas storage

4.3bcm working gas volume1 Robust cash margins2 11 facilities in Germany and Czech Republic Modern, cost-efficient storage facilities

slide-75
SLIDE 75

page 73 innogy · company presentation · 1 August 2016

Gas storage – despite poor summer-winter spreads, innogy’s gas storages with robust cash margin position

Source: innogy estimates based on publicly available data and market intelligence. 1 As of 30 Jun 2016. 2 Excluding storage facility for which closure has been initiated. 3 Cash margin defined as (revenue ./. opex); revenues are simulated at current market prices and do not take into account possible long-term contracts; opex is estimated on basis of available technical and other parameters such as type, size, depth of storage, etc. 4 Includes one facility which will be closed; another facility is represented by two bars representing the

  • riginal facility and its extension, bringing innogy’s total number of storages to 7 in the ranking for North-Western Europe.

Grid & Infrastructure – Germany/East

innogy’s gas storage portfolio in Germany and the Czech Republic

Industry cash margins3 innogy facilities4 Closure initiated 6 storage facilities 2.71

Working gas volume (bcm)1

5 storage facilities2 1.63

> innogy’s gas storage portfolio mainly comprising of cavern storages in Germany and depleted gas fields in the Czech Republic > Comparably high cash margins > Industry-leading feed-in times – well-positioned to benefit from German ‘Energiewende’

  

Storage system operator in Germany Storage system operator in the Czech Republic North-Western Europe Czech Republic, Slovakia and Austria

innogy’s gas storage portfolio exclusively comprising of cash-generative assets – strategic measures taken in the past for best positioning to capture future upsides

slide-76
SLIDE 76

page 74 innogy · company presentation · 1 August 2016

RWW – innogy‘s water competence is one of the largest in Germany

> RWW is one of the largest privately owned water utilities in Germany > Provides drinking water to 135k connections and 900k citizens > Industrial customer base and hydroelectric power plant diversify business profile > Stable, concession-based business models providing long-term earnings visibility (important current concessions until 2027) > Awarded as top water utility 2016 in several categories such as quality, service and transparency

RWW at a glance RWW overview

Direct supply Supply to third-party distributors Emergency water supply Water protection area

Burlo Weseke

Velen Gescher-Hochmoor Reken Borken Raesfeld-Erle Schermbeck Dorsten Gladbeck Bottrop

Grid & Infrastructure – Germany

Wesel Dinslaken

Essen (innogy headquarter)

Ratingen Wülfrath Velbert Heiligenhaus Duisburg Gelsenkirchen Oberhausen

Service point Water treatment plant Water reservoir Distribution grid

Note: all figures based on RWW Rheinisch-Westfälische Wasserwerksgesellschaft mbH (2016) - RWW Umwelterklärung 2015, unless otherwise stated. 1 Company information.

Mülheim an der Ruhr (RWW headquarter)

~3,000 km

grid length

850 km²

area served

~75m m³

drinking water supplied in 2015

€33m1

2015A EBITDA

63,000 m³

capacity1 of RWW’s 13 reservoirs Monopolistic, quasi-regulated industry structure

slide-77
SLIDE 77

page 75 innogy · company presentation · 1 August 2016

Grid & Infrastructure Germany – key takeaways

1 Regulated asset base. Numbers based on latest notification by regulator or based on calculations in latest filings with regulators. Expected increase in German regulated asset base calculated as RAB 2010/2011 plus net investments (post concession gains/losses) in regulated assets in the years 2010/2011 to 2015/2016E, assuming full recognition by the regulator. Throughout this presentation, RABs are always stated excluding pro-rata share of RAB from participations that are not fully consolidated. 2 Nominal return on equity on existing RAB until 2017/18 according to German ARegV for new assets (post 2005); 7.14% real for old assets (pre 2006); stated returns pre corporate tax, after trade tax. Based on current initial proposal from BNetzA, return on equity to change to 6.91% for new assets and 5.12% for old assets in the next regulatory period.

Grid & Infrastructure – Germany

9.05%² until 2017/18 return on equity for current regulatory period in Germany €9.7bn RAB¹ Among the leading RES-integrators in Germany

~97%

efficiency factor in Germany €9.7bn RAB¹ 9% RAB increase expected for German RAB¹

GER

slide-78
SLIDE 78

page 76 innogy · company presentation · 1 August 2016

Grid & Infrastructure – East

Distributed volume (GWh) 66,500 16,800 7,200 3,700 Grid customers (m)4 2.3 2.3 1.0 0.6 Grid area (‘000 km²) 46 20 0.5 16 Grid length (‘000 km)5 65 67 17 22 RAB¹ €1.6bn €0.9bn €0.7bn €0.5bn Country rating6 A1 Ba1 A2 A2

Gas Electricity

Leading positions in Eastern markets based on diverse electricity and gas portfolio in four different countries

CZ HU PL SK

PL HU SK CZ

#2

electricity DSO

Hungary3

+9%

increase 2011-’15 for Eastern countries’ RAB2

€3.6bn

regulated asset base (RAB)1

#1

gas DSO Czech Republic3

Note: all figures as of 2015. 1 Generally, RABs from different regulatory regimes are not directly comparable due to significant methodological differences (e.g. regulatory periods, regulatory depreciation periods). Also, throughout this presentation, RABs are always stated excluding pro-rata share of RAB from participations that are not fully consolidated. Numbers based on latest notification by regulator or based on calculations in latest filings with regulators. RAB values reflect RABs relevant for the tariff in 2015. 2 Historic increase in regulated asset base for Eastern countries calculated as RAB relevant for tariff in 2015 vs. RAB relevant for tariff in 2011 (in € at constant 2011 year-end exchange rates) for Czech Republic, Hungary and Poland. Growth rate excludes Slovakia as RAB was introduced in 2012 only and RAB will only be adjusted in next regulatory period starting 2017. Including FX effects, RAB would have increased by ~7%. 3 Based on distributed volume. 4 Grid customers are defined as supplied delivery points. 5 Based on operated grid. 6 Source: Moody’s.

slide-79
SLIDE 79

page 77 innogy · company presentation · 1 August 2016

Grid & Infrastructure – East

innogy’s Eastern Europe operations – a success story

Restructuring

> Restructuring of acquired incumbents > Process improvement and best practice transfer

Experience

> Successfully managed several regulatory periods in different regulatory environments > Systematically optimising businesses within regulatory frameworks

Strong partnerships

> Good working partnerships with governments, municipalities and financial investors > Support governments in energy market transition and play active and important role in DSO landscape

Operational excellence

> Increased efficiency with continuous process optimisation and best practices > Exchange of DSO knowledge with Germany

Innovation

> Development of innovative pilot projects > Grid automation contributing to and benefitting from German ‘Energiewende’ know-how

Key pillars of value creation in Eastern European countries

 Successfully entered markets via privatisation between 1995 and 2003 at attractive valuations  Diverse portfolio of grid businesses/infrastructure across different markets and commodities  Further growth potential in Eastern Europe through further demand growth and additional RES integration

slide-80
SLIDE 80

page 78 innogy · company presentation · 1 August 2016

Czech Republic – track record of continuous optimisation and investments

1 Source: Energy Regulatory Office (2016): yearly report on the operation of the Czech gas system in 2015. Based on distributed volume in 2015. 2 As of 2015. 3 Nominal WACC value. 4 Only DSO.

Grid & Infrastructure – East  Long-standing experience in regulatory management and established relationship with regulator. Successfully managed the business through 3 regulatory periods since entry in 2002  Continuously optimised processes/increased efficiency (# of employees decreased by ~10% since 2007)2  Significant simplification of governance structures and realisation of operative synergies (regional integrated companies transformed to nation-wide functional business)  Successful financial partnership with a consortium of funds managed by Macquarie Infrastructure and Real Assets, the 49.96% shareholder (increased from 35% in 2015)  Continuous increase of RAB to €1.6bn €1.6bn RAB2 RAB increase

  • vs. last period

7.94% WACC3 (RP 2016-18) Significant simplification of structures Gas distribution market share1 Regulation Geographical presence Country highlights

2002 6 regional integrated gas companies 2013 1 company

RWE GasNet4

JMP

SČP VČP SMP STP JMP JČP ZČP innogy 83% Other DSOs 17%

slide-81
SLIDE 81

page 79 innogy · company presentation · 1 August 2016

Hungary – leading distributor in Budapest and North-East – setting the pace of innovation in Hungary

1 Based on innogy estimation of distributed volumes (figures revised). 2 As of 2015. 3 Real WACC value. 4 innogy subsidiaries: ~54% and ~55% share in ÉMÁSZ and ELMÚ, respectively.

Grid & Infrastructure – East  Long-standing experience in regulatory management and established relationship with regulator. Successfully managed the business through 4 regulatory periods since entry in 1995  Successful integration of two operating companies (ELMÚ/ÉMÁSZ) through steering by one management team  Future strategic focus on exploitation of digital grid solutions to increase network quality and increase

  • perational efficiency

 Decrease in RAB vs. previous regulatory period driven mainly by negative fluctuations in the exchange rate between EUR and HUF  Re-increased investment volume and improved

  • perational efficiency to compensate for

remuneration decrease caused by politically driven energy price cuts and sector specific taxes  Development of innovative pilot projects in cooperation with local authorities, e.g. urban solutions €0.9bn RAB2 RAB decrease

  • vs. last period

6.23% WACC3 (RP 2013-16) Electricity distrib. market share1 Regulation Geographical presence Country highlights

ÉMÁSZ4 TITÁS DÉMÁSZ DÉDÁSZ ÉDÁSZ ELMÚ4

innogy 43% Other DSOs 57%

slide-82
SLIDE 82

page 80 innogy · company presentation · 1 August 2016

Poland – distributor for dynamically growing Warsaw – actively involved in innovating Polish distribution sector

1 Based on distributed volume. Data as of 2015. 2 As of 2015. 3 RAB adjusted each year. 4 Nominal WACC value confirmed for 2016; following years to be adjusted according to risk free rate development. 5 System average interruption duration index. 6 System average interruption frequency index. 7 Source: company information about the largest Polish DSOs as per FYE 2014.

Grid & Infrastructure – East  Long-standing experience in regulatory management and established relationship with regulator. Successfully managed the business through 3 regulatory periods since entry in 2003  Our DSO plays an active important role in the DSO landscape and chairs the TSO and DSO association  Leveraging position in capital city of Warsaw to extend innovation leadership, e.g. AmpaCity and a unique prototype of a demand response tool  Front runner role in Poland with smart metering pilot project for 100,000 meters in Warsaw leading to additional remuneration  Very good SAIDI5 and SAIFI6 rates among Polish incumbent DSOs7  Continuously increased RAB; regulatory step-up reached in 2014 Warsaw €0.7bn RAB2 RAB increase

  • vs. last period3

5.675% WACC4 (RP 2016-20) DSO for dynamically growing capital Warsaw Electricity distrib. market share1 Regulation Geographical presence Country highlights innogy 6% Other DSOs 94%

slide-83
SLIDE 83

page 81 innogy · company presentation · 1 August 2016

Slovakia – No. 3 position – successful cooperation with Slovakian government, full consolidation since 2015

1 Source: Energy Analytics – Energeticky TRH SR 2015. 2 RAB introduced in 2012. 3 Real WACC in 2016. 4 Subsidiary of VSE Holding. 5 Refers to 2010-2015.

Grid & Infrastructure – East  Long-standing experience in regulatory management and established relationship with regulator. Successfully managed the business through 3 regulatory periods since entry in 2003  Strong partner to the Slovakian government with full management rights  Constant RAB within last regulatory period  49% shareholding, however, full consolidation under IFRS since 2015 driven by management rights assigned to innogy  Ongoing smart metering roll-out >4MWh p.a. until 2020 and clear focus to increase grid automation  Constant investment of ~€40m p.a.5 – continuous asset renewal, increase quality of supply and safety of

  • perations

€0.5bn RAB2 Constant RAB

  • vs. last period2

6.12% WACC3 (RP 2012-16) Electricity distrib. market share1 Regulation Geographical presence Country highlights VSD4 (innogy) SSE-D ZSD innogy 20% Other DSOs 80%

slide-84
SLIDE 84

page 82 innogy · company presentation · 1 August 2016

East – regulation across countries with near-term stability of regulatory parameters

Regulatory model overview Regulatory period overview

CZ HU PL SK

Electricity distribution Gas distribution

> Transparent regulatory framework > Close interaction with regulators based on years of trust and reliability > Similar formulae for regulated revenues/prices in all four countries > Stable returns from RAB

  • For 2/3 of East RAB (CZ and PL) expected until 2018

and 2020 respectively due to both regulatory periods beginning in 2016

  • For 1/3 of East RAB (SK/HU) trustful consultations
  • ngoing on new regulatory period starting 2017

A

Grid & Infrastructure – East

2015 2017 2019 2021 2016 - 2020 2017 - 2020 2016 - 2018 2017 - 2021

Largest RABs in stable countries Broadly similar regulation systems Overlapping regulatory periods provide stability

slide-85
SLIDE 85

page 83 innogy · company presentation · 1 August 2016

Operational excellence – reflected in continuous improvement of quality of distribution

Grid & Infrastructure – East

Source: innogy company information. 1 Quality parameters among countries not directly comparable due to different grid structures and technical conditions. 2 System average interruption duration index is a reliability indicator of average outage duration for each customer served, measured in minutes per annum. 3 System average interruption frequency index is a reliability indicator of average numbers of interruptions per year. 4 Comparable methodology starting from 2012. As per innogy company information. 5 Metrics presented related to ELMÚ.

Improving grid performance1…

Slovakia: significantly improved quality of supply > Result of considerable increase in investment volume > Replacement of critical assets and grid renewal > After roll-out of high voltage grid automation, ongoing roll-out in medium voltage space > Shorter response times in case of outages by introduction of modern workforce management system > Regulator is monitoring various quality standards, customers are automatically compensated by DSO if not keeping a quality standard Hungary: DSO improvement measures > Intelligent medium voltage/low voltage stations > Grid automation solutions > Upgrade of IT solutions: mobile workforce management, supervisory control and data acquisition system, condition-based maintenance strategy and advanced geographical information systems > Investment strategy incentivised by bonus/malus system

SAIDI (min)2 SAIFI3

…driven by focus on modernisation investments B

157 73 126 63 2012 2015 2010 2015 2.15 1.19 1.72 1.02 2012 2015 2010 2015

SK4 HU5 SK4 HU5

slide-86
SLIDE 86

page 84 innogy · company presentation · 1 August 2016

Future investments in East mainly driven by replacement and customer connections

1 Capex including financial investments. 2 Non-grid capex contains investments in storage, overhead (e.g. renewal of buildings, IT investments) and other. 3 Other grid capex primarily includes IT investments or third party capex. 4 Mainly relates to smart meter investments.

Grid & Infrastructure – East

Replacement > Optimisation of existing grid > Modernisation of stations and gas pipelines; construction of cables and

  • verhead lines on all voltage levels

> Increases operational efficiency and reduces O&M costs Customer Connections > Growth in connection numbers driven by underlying macro factors (population, energy demand) > Mostly customers from existing grid; new lines where load demand exceeds current capacity > Connections of renewables so far less pronounced, but growth foreseeable in the future Other > Primarily IT hardware and software > Third party driven investments rebuilding existing grid routes or cabling

  • verhead lines to free the ground

Capex breakdown¹ C

~€1.0bn of investments 2016-18E will continue to drive growth in innogy’s Eastern markets

Replacement 70% Other grid capex3 5% Customer connections 17% ‘Energiewende’ investments4 1% Non-grid capex 6%2

2016-18E total capex G&I East ~€1.0bn1

slide-87
SLIDE 87

page 85 innogy · company presentation · 1 August 2016

Value creation through market entry capabilities and continuous optimisation €9.7bn RAB¹

Operational excellence

(SAIDI/SAIFI)

#1

gas DSO in Czech Republic3

Electricity Gas

€3.6bn

RAB¹

9% RAB increase

2011-2015 for East RAB2

Grid & Infrastructure East – key takeaways

Grid & Infrastructure – East CZ HU PL SK

1 Generally, RABs from different regulatory regimes are not directly comparable due to significant methodological differences (e.g. regulatory periods, regulatory depreciation periods). Also, throughout this presentation, RABs are always stated excluding pro-rata share of RAB from participations that are not fully consolidated. Numbers based on latest notification by regulator or based on calculations in latest filings with regulators. RAB values reflect RABs relevant for the tariff in 2015. 2 Historic increase in regulated asset base for Eastern countries calculated as RAB relevant for tariff in 2015 vs. RAB relevant for tariff in 2011 (in € at constant 2011 year-end exchange rates) for Czech Republic, Hungary and Poland. Growth rate excludes Slovakia as RAB was introduced in 2012 only and RAB will only be adjusted in next regulatory period starting 2017. Including FX effects, RAB would have increased by ~7%. 3 Based

  • n distributed volume.
slide-88
SLIDE 88

page 86 innogy · company presentation · 1 August 2016

Grid & Infrastructure – key takeaways

Grid & Infrastructure

4 1 2 3 5

A leading European distribution grid operator Predictable, regulated earnings contribution – secured by stable regulatory frameworks Highly efficient operations with excellent network reliability Investment opportunities from renewables expansion Further growth through dedicated investments as key driver for regulated profit growth

9.05%3 until 2017/18

return on equity for current regulatory period in Germany

€13.3bn

RAB¹

Among the leading RES-integrators in Germany ~€4.1bn

2016-18E G&I capex5

~97%

efficiency factor in Germany

9% RAB increase2

for East 2011-15

9% RAB increase¹

expected for Germany

~6.5%4

pro-forma WACC Eastern European countries

Continuous

  • ptimisation

1 Regulated asset base. Numbers based on latest notification by regulator or based on calculations in latest filings with regulators. Expected increase in German regulated asset base calculated as RAB 2010/2011 plus net investments (post concession gains/losses) in regulated assets in the years 2010/2011 to 2015/2016E, assuming full recognition by the regulator. Generally, RABs from different regulatory regimes are not directly comparable due to significant methodological differences (e.g. regulatory periods, regulatory depreciation periods). Throughout this presentation, the RAB relevant for the 2015 tariff figure is used. Also, throughout this presentation, RABs are always stated excluding pro-rata share of RAB from participations that are not fully consolidated. 2 Historic increase in regulated asset base for Eastern countries calculated as RAB relevant for tariff in 2015 vs. RAB relevant for tariff in 2011 (in € at constant 2011 year-end exchange rates) for Czech Republic, Hungary and Poland. Growth rate excludes Slovakia as RAB was introduced in 2012 only and RAB will only be adjusted in next regulatory period starting 2017. Including FX effects, RAB would have increased by ~7%. 3 Nominal return on equity on existing RAB until 2017/18 according to German ARegV for new assets (post 2005); 7.14% real for old assets (pre 2006); stated returns pre corporate tax. Based on current ‘initial’ proposal from BNetzA, return on equity to change to 6.91% for new assets and 5.12% for old assets in the next regulatory period. 4 Pro-forma RAB-weighted average WACC of CZ, HU, PL and SK. SK RAB only included for 4 months due to first-time consolidation of VSE in 2015. 5 Including financials investments.

slide-89
SLIDE 89

Grid & Infrastructure

Regulatory deep dive

slide-90
SLIDE 90

page 88 innogy · company presentation · 1 August 2016

Note: numbers may not add up due to rounding. 1 Numbers based on latest notification by regulator. RAB stated excluding pro-rata share of RAB from participations that are not fully consolidated. 2 Pre-tax WACC (before corporate and trade tax) calculated based on several assumptions, including 60/40% debt/equity ratio of regulatory assets and 50/50% split new/old assets. Return on regulatory equity for new/old assets of 9.05% nominal/7.14% real (before corporate tax, after trade tax). Cost of debt of ~4% pre-tax. 3 Operating income from investments, to a large extent comprising of at-equity income from investments, included within EBITDA.

G&I Germany EBITDA driven by significant asset base and income from participations and complementary activities

Grid & Infrastructure – Regulatory deep dive

Breakdown of 2015 EBITDA (€bn) Earnings composition

> RAB of fully consolidated grid businesses > Pro-forma WACC based on 2010/2011 regulatory cost of equity and debt and blended capital structure of our regulated businesses > Grid sales > Non-regulated grid business (e.g. grid services) > Regulatory acknowledged depreciation vs. IFRS > Additional regulatory compensation (e.g. investment measures in 110kV grid) > Operational efficiencies > Gas storage business in Germany > Quasi-regulated water business > Other > Mainly participations and JVs with municipal utilities Grid Part. Other

Regulated asset base1 9.7 Pro-forma WACC2 6.1% Return on RAB 0.6 Other grid earnings (regulated/ unregulated) 0.4 D&A (IFRS) 0.5 Grid EBITDA 1.5 Income from participations³ 0.2 Non-grid business/other 0.3 EBITDA 2.0

Grid Part. Other

slide-91
SLIDE 91

page 89 innogy · company presentation · 1 August 2016

German incentive regulation provides for a predictable and stable remuneration framework

Grid & Infrastructure – Regulatory deep dive

Note: figures based on current parameters – may be subject to change. 1 Maximum value. 2 Returns before corporate tax, after trade tax.

Ex-ante revenue cap regulation

> No volume risk – DSOs not impacted by fluctuations in demand > Stable ex-ante framework codified by law, as opposed to ex-post supervision by regulator > Revenue cap mechanically updated year by year – mainly without regulatory discretion

Cost recognition based on DSO’s actual cost base

> Cost recognition stable for 5-year regulatory periods > Non controllable costs treated as pass-through in regulatory formula > Inflation factor as effective macro hedge

RAB remuneration determined for entire regulatory period

> RAB split into 40% equity1 and 60% debt by regulatory definition > Return on regulatory equity fixed at nominal 9.05% (7.14% real for old assets)2 for entire regulatory period until 2017/18 > Cost of debt treated as pass-through and therefore allows for natural hedge against changes in interest rate environment

Remuneration mechanisms for grid expansion

> Expansion factor included in revenue cap formula with 1-year time lag > Investment measure mechanism recognised without time lag, established to support expansion of 110kV investments

slide-92
SLIDE 92

page 90 innogy · company presentation · 1 August 2016

German incentive regulation – a mature and stable system

Grid & Infrastructure – Regulatory deep dive

Regulatory timeline

1 Return on equity. 2 BNetzA’s current initial proposal for return on equity as per current consultation process. 3 Nominal. New assets subject to historic cost accounting. 4 Real. Old assets subject to current cost accounting. 5 Returns before corporate tax, after trade tax.

Electricity Gas RoE1 Elec./Gas

1st regulatory period (5 years) 3rd regulatory period (5 years) 2nd regulatory period (5 years) Cost base in 2011 relevant for revenue cap in 2nd regulatory period Cost base in 2016 relevant for revenue cap in 3rd regulatory period Cost base in 2010 relevant for revenue cap in 2nd regulatory period Cost base in 2015 relevant for revenue cap in 3rd regulatory period 1st regulatory period (4 years) 3rd regulatory period (5 years) 2nd regulatory period (5 years) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 9.29% 7.56% 9.05% 7.14% 6.91%2 5.12%2 New assets3 Old assets4 Return on imputed equity (RoE)5 Base year Initial proposal BNetzA

slide-93
SLIDE 93

page 91 innogy · company presentation · 1 August 2016

  • Max. 40%

Returns on RAB

Revenue cap is determined based on returns on RAB + imputed depreciation + base year cost base

Composition of revenue cap pre-efficiency, expansion and inflation factor

Grid & Infrastructure – Regulatory deep dive

Return on Equity Controllable Costs RAB Regulatory capital structure Asset value Financial debt Excess equity 60%

Actual cost of debt in base year compensated as pass-through Compensated with ~4%¹ Compensated with 9.05% (nominal)/ 7.14% (real) for new/old assets2

Note: figures based on current parameters – may be subject to change. Discussion of (i) revenue cap (leaving out other components such as (a) quality element (§19 ARegV), (b) volatile costs (§11 ARegV),

  • r (c) regulatory accounts (§5 ARegV)) and of (ii) asset base (leaving out other components such as (a) financial assets or (b) deduction capital) for illustrative purpose only.

1 3.98% for electricity and 4.19% for gas as per second regulatory period. 2 Returns before corporate tax, after trade tax.

Imputed depreciation and trade tax Acknowledged opex

Imputed depreciation equivalent to linear depreciation of regulatory asset values Regulatory asset life differs from IFRS and German GAAP

and

Imputed trade tax equivalent to trade tax on the regulatory return

  • n equity, calculated before

corporate tax (~15%) but after trade tax (~15%) Derived from P&L under German GAAP for regulated grid business As acknowledged by regulator, subject to regulatory cuts

and

Revenue cap

Equity

slide-94
SLIDE 94

page 92 innogy · company presentation · 1 August 2016 > Regulatory return on equity and excess equity > Imputed trade tax > Imputed depreciation > Directly derived from P&L statement under German GAAP > Actual cost of debt as pass-through

Grid & Infrastructure – Regulatory deep dive

Note: illustrative discussion of revenue cap leaving out other components such as (i) quality element (§19 ARegV), (ii) volatile costs (§11 ARegV), or (iii) regulatory accounts (§5 ARegV). 1 Additional components include, e.g. advances and construction grants, pension costs or non-wage labour costs.

Actual/ imputed Regulator perspective Efficient controllable costs Trade tax Return on equity

Benchmarking process

Depreciation Opex

Expense equivalent costs Imputed costs

Controllable costs subject to efficiency adjustment

> Productivity targets mandated by the regulator and inflation > The relevant efficiency parameters of each DSO are benchmarked > Revenue targets are set taking into account targeted efficiency gains on controllable costs

  • ver the regulatory period

Non-controllable costs

> Costs incurred outside of influence of DSO like payment for use of higher voltage levels of

  • ther grid operators and subsidies for

decentralised generation1 > Partially annually adjusted

Non- controllable costs

2011 base year During regulatory period

Cost of capital

Inefficient controllable costs

Revenue cap is adjusted for efficiency, productivity and inflation to mirror developments between base years

Current regulatory period – before adjustments for investments

Non-controllable costs Controllable costs Revenue cap Inflation Productivity Efficiency

Cost of debt

slide-95
SLIDE 95

page 93 innogy · company presentation · 1 August 2016

Revenue cap ‘mechanics’ – two levers to adjust for investments completed between base years

Grid & Infrastructure – Regulatory deep dive

Annual adjustment of controllable costs via expansion factor > Applies to medium- and low voltage levels1 > Measured by relative growth of area supplied (low voltage) and relative growth of number of connections Annual adjustment of non-controllable costs > Investment measures treated as non-controllable costs (110kV networks)

1 2 1 2

2nd regulatory period - exemplary for electricity regulation

Inflation, productivity, efficiency and expansion factors and adjustments to non controllable costs

Non- controllable Controllable Expansion Inflation Productivity Adjustment

2 1

Efficiency

  • Non con
  • trollable

costs Non con

  • trollable

costs Controll

  • able

costs Controll

  • able

costs 2014 2015 2016 2017 2018

Source: innogy; BNetzA. Note: illustrative discussion of revenue cap leaving out other components such as (i) quality element (§19 ARegV), (ii) volatile costs (§11 ARegV), or (iii) regulatory accounts (§5 ARegV). 1 Independent of pressure ratings for gas.

Revenue Cap

slide-96
SLIDE 96

page 94 innogy · company presentation · 1 August 2016

3rd regulatory period – changes to both existing framework and to key parameters – need for combined assessment

Grid & Infrastructure – Regulatory deep dive Proposed amendments for next regulatory period need to be assessed as a ‘single package’ since individual changes can, to some extent, be compensated/mitigated by other measures

Changes to regulatory framework Changes to parameters within given framework

> German government decides

  • n draft regulation proposal

> Key changes

  • Capital cost true-up
  • Special bonus for efficiency
  • Increased transparency

Changes to regulatory framework > Upper House of Parliament (Bundesrat) decides on draft proposal > Most changes will apply only with start of the 3rd reg. period > Government to give consent to Bundesrat decision

1 Jun 2016 8 Jul 2016 Early August 2018/19

> BNetzA releases initial proposal for return on equity and starts consultation process > Final decision expected > End of consultation process

6 Jul 2016/ 13 Jul 2016 10 Aug 2016 Sep/Oct 2016 Current RP Next RP

Return on equity

> New assets 9.05% > Old assets 7.14% > New assets 6.91% > Old assets 5.12%

Productivity factor

> 1.5% > Not yet specified > Changes will apply only with start of the 3rd reg. period

2018/19

Changes to parameters within given framework

slide-97
SLIDE 97

page 95 innogy · company presentation · 1 August 2016

Potential changes in 3rd regulatory period proposed by German government1

Grid & Infrastructure – Regulatory deep dive

Source: Verordnungsentwurf Bundesregierung, Bundesrat as per 8 July 2016. 1 Updated for amendments made by the Bundesrat as per 08 Jul 2016. Decision by federal cabinet expected in early August. 2 Previously time lag of up to 7 years.

Elimination of time-lag for investment budgets

> Update of remuneration on regulatory asset base during regulatory periods

  • Recognition of new investments in RAB² on yearly basis
  • RAB remuneration to be reduced annually in line with

depreciating asset base

  • Investments from 2007 to 2016 exempt from changes in

remuneration

Bonus for most efficient DSOs

> Introduction of new bonus for most efficient DSOs > Available to DSOs with 100% efficiency to encourage innovative investments in grid technology and expansion

Increased transparency

> Regulator to publish additional information on the regulatory parameters and targets

Draft proposal for 3rd regulatory period…

Significant investments planned in the future Superior operational performance Innovative solutions for ‘Energiewende’ challenges Change will only impact G&I’s financial performance from 2019 (electricity)/2018 (gas)

  • nwards

  

…provides further opportunities

slide-98
SLIDE 98

page 96 innogy · company presentation · 1 August 2016

G&I East EBITDA driven by significant asset base and other grid earnings

Grid & Infrastructure – Regulatory deep dive

Breakdown of 2015 EBITDA (€bn) Earnings composition

> RAB of fully consolidated grid businesses in CZ, HU, PL and SK > Pro-forma WACC based on weighted average implied WACCs for all 4 countries > Regulatory acknowledged depreciation vs. IFRS > Others (non-regulated services, volume corrections) > Operational efficiency > Participations: ZOV (Zagreb waste water business) > Gas storage business in CZ Grid Part./Other

Regulated asset base1,2 3.6 Pro-forma WACC 6.5%³ Return on RAB 0.2 Other grid earnings (regulated/unregulated) 0.2 D&A (IFRS) 0.2 Grid EBITDA 0.6 Income from participations2,4 0.1 Non-grid business/other 0.1 VSE consolidation effect 0.1 EBITDA 0.9

Grid Part./Other

Note: numbers may not add up due to rounding. 1 Generally, RABs from different regulatory regimes are not directly comparable due to significant methodological differences (e.g. regulatory periods, regulatory depreciation periods). Also, throughout this presentation, RABs are always stated excluding pro-rata share of RAB from participations that are not fully consolidated. Numbers based on latest notification by regulator or based on calculations in latest filings with regulators. RAB values reflect RABs relevant for the tariff in 2015. 2 First-time full consolidation of VSE during 2015. Pro-forma RAB value shown assuming full-consolidation of VSE during 2015. For calculation purposes, RAB only included for 4 months in 2015. Income from participations for VSE included for 8 months in 2015. 3 Pro-forma RAB-weighted average WACC of CZ, HU, PL and SK. SK RAB only included for 4 months due to first-time full consolidation of VSE in 2015. 4 Income from participations, to a large extent comprising of at-equity income from investments, included within G&I EBITDA.

slide-99
SLIDE 99

page 97 innogy · company presentation · 1 August 2016

East regulation – similar key elements with country specific characteristics

1 Nominal WACC value. 2 Real WACC value. 3 Nominal WACC numbers confirmed for 2016; following years to be adjusted according to risk free rate development. Nominal WACC value. 4 Efficiency factor reflects elements of individual as well as industry/macro-related productivity components. 5 Revised. 6 Bonus/malus system for stability. 6 Inflation effects considered in regulatory revenues.

Grid & Infrastructure – Regulatory deep dive Regulatory model overview Czech Republic Hungary Poland Slovakia General

Current regulatory period 2016-2018 2013-2016 2016-2020 2012-2016 Type of regulation Revenue cap Price cap Price cap Price cap Incentive elements in regulatory framework

   

RAB/WACC

Regulated asset base (RAB) €1.6bn €0.9bn €0.7bn €0.5bn Regulatory WACC (pre-tax) 7.94%1 6.23%2 5.675%3 6.12%2

Regulatory

  • pex

treatment

Efficiency factor4

   

Pass-through of financing costs

 5  

Other

Regulation of quality of supply6

   

Exposure to volume risk

   

Inflation6

   

Compensation for investments

   

slide-100
SLIDE 100

page 98 innogy · company presentation · 1 August 2016

Regulatory deep dive – key takeaways

Grid & Infrastructure – Regulatory deep dive

Key takeaways

4 1 2 3 5

Mature regulatory frameworks with predictable and stable remuneration Strong experience in managing regulatory frameworks across countries 3rd regulatory period in Germany – changes under discussion with differentiated effects – no fundamental change to overall framework High operational efficiency and innovative solutions leading to outperformance Strong post-tax earnings contribution from participations (included in EBITDA)

slide-101
SLIDE 101

Retail

slide-102
SLIDE 102

page 100 innogy · company presentation · 1 August 2016

Retail at a glance

1 With respect to the Retail segment, the term customers refers to customer contracts (electricity and gas counted separately) throughout the presentation. 2 In terms of electricity and gas supply. Active in more than 20 countries with energy+ and electric vehicle infrastructure. 3 Market positions based on volumes, or, in the case of Czech Republic, Poland, Netherlands and Belgium, based on customer numbers, as per latest available data, electricity and gas markets counted separately.

Retail Retail

Leading energy retailer serving 23m customers1 in 11 European countries2 Turnaround of UK retail business well on track and £200m cost savings programme launched Market leading positions with four #1 and six further top 3 positions3 Resilient financials with stable overall customer base and significant cash generation Significant and growing energy+ business and growth optionality from front runner positions in new solutions

slide-103
SLIDE 103

page 101 innogy · company presentation · 1 August 2016

European leader serving 23m customers with energy and energy+ products

1 With respect to the Retail segment, the term customers refers to customer contracts (electricity and gas counted separately) throughout the presentation. 2 In terms of electricity and gas supply. Active in more than 20 countries with energy+ and electric vehicle infrastructure. 3 Market positions based on volumes, or, in the case of Czech Republic, Poland, Netherlands and Belgium, based on customer numbers, as per latest available data, electricity and gas markets counted separately. Source: Company estimate based on competitors’ disclosure, regulatory reports and research reports.

Retail

Diversified electricity and gas customer base

# contracts 2015 Germany 8.1m 35% East 5.4m 23% UK 5.0m 22% Netherlands/Belgium 4.7m 20% Electricity 16.2m 70% Gas 7.0m 30% Total 23m customers1 Electricity Gas 2 5 2 3 5 5 5 3 2 4 4 2

23m

customers1 Active in

11

countries2

16x top 5

positions3

~€110m/ ~€70m

EBITDA/ OR from energy+

€1bn

EBITDA 2015

4x #1

positions3 1 1 1 1

slide-104
SLIDE 104

page 102 innogy · company presentation · 1 August 2016 ~ 110 > 150 ~ 70 > 100 2015 2018E (€m) EBITDA OR

Stable and diversified business with growing share of energy+ products

1 Segment breakdown based on sum of operating segment results (€4.7bn). Total includes €(0.2)bn presented as ‘Other, consolidation’ in the combined financial statements. Numbers might not add up due to rounding differences.

Retail

61% 21% 17% innogy EBITDA 2015 Renewables Retail Grid & Infrastructure €4.5bn > Solid and diversified business in continental Europe with stable margins and customer numbers > Negative OR development in UK due to operational difficulties > UK turnaround offering substantial rebound potential > Significant momentum in non- commodity energy+ business > Heat business currently largest earnings contributor > Other energy+ activities expected to gain significant share in medium term > innogy well positioned to capture future growth

Retail within innogy... ...with stable earnings contribution... …and a growing energy+ business

1

1,113 1,069 988 747 775 1,053 2013 2014 2015 EBITDA (€m) Total Total excl. UK Margin 2.8% 3.0% 2.8%

slide-105
SLIDE 105

page 103 innogy · company presentation · 1 August 2016

52 64 98 106 148 189 158 212 287 2013 2014 2015 Total excl. UK UK > Capital light business with investments representing only up to 14%

  • f total innogy capex2
  • Limited investments; mostly into IT
  • Growing share of energy+ related capex
  • Capex intensity <30% (excl. UK <10%)

> Increase driven by IT investments into UK smart meter infrastructure, to be largely completed by 2017 > Energy+ investments related to

  • Investments into energy+ asset base (mainly heating business/

CHP projects in Germany)

  • Product development

> IT investments driven by digitalisation and UK smart meter roll-out > Selected small-scale acquisitions to facilitate/strengthen market entries and add further energy+ skills

Significant cash generation

Capital light business with significant cash generation

Retail

energy+ 40-50% IT incl. smart meter 25-35% Bolt-on acquisitions 10-20% Other 10-15% Total ~€800m Capex (€m) Capex intensity1

14% 20% 29%

2016E – 2018E breakdown of capex3

1 Capex intensity defined as capex/EBITDA. Figures excl. UK exclude UK contribution for both capex and EBITDA. 2 2013 to 2015. 3 Capex including financial investments.

Future investments mostly energy+ and IT related

Capex intensity

  • excl. UK1

7% 8% 9%

slide-106
SLIDE 106

page 104 innogy · company presentation · 1 August 2016

> Extend CHP solutions and heating products and services > Flexible roll-out of energy+ product range > Grow in ‘prosumer’/ home energy solutions

Focus on sustainable increase of customer value in existing business by growing energy+ and by creating optionality

Retail

> Optimise along value drivers and across markets > Achieve turnaround in UK > Cross-selling of second commodity and expansion into new markets > Build on front runner positions to capture future growth (e.g. electric vehicle charging stations) > Become active innovator in the new energy world > Identify and commercialise emerging opportunities early on

Create options for new business C Maximise value of commodity business A Grow energy+ business B

slide-107
SLIDE 107

page 105 innogy · company presentation · 1 August 2016

Large customer portfolio across 11 connected markets

Note: B2B including industrial customers as well as resellers, B2C including residential and commercial customers. Depending on national regulations and market specifics, the individual attribution of customers to our B2C or B2B business may vary to a certain extent across our markets. 1 Customer numbers are rounded to the nearest 10,000 customers. Numbers may not add up due to rounding differences.

Retail

Well diversified portfolio across Europe in gas and electricity…

# contracts in m as of 2015 6.8 1.3 2.5 2.2 3.0 2.0 0.9 0.5 0.1 UK GER NL/ BE 2.1 0.3 1.3 PL CZ SK RO SL 0.1 CR HU Electricity Gas

Customers (‘000)1 B2B B2C

GER

60 8,060

NL/BE

10 4,700

East

10 5,400

UK

20 4,980

Total

110 23,130

…and private and business clients

Total 243TWh Total 212TWh

Volume gas Volume electricity

B2C 25% B2B 75%

A

B2C 42% B2B 58%

slide-108
SLIDE 108

page 106 innogy · company presentation · 1 August 2016

Improved steering of Retail segment enables further

  • perational efficiencies

1 Coordination within RWE East segment since 2011, retail board since 2014.

Retail  Further push best practice sharing across the

  • rganisation by functional

steering  Allow for consistent strategy and agile product launches, particularly for energy+  Enhance operational controls  Preserve customer proximity and local responsibilities

Key benefits

Retail managed at country level > Countries acting relatively independently > Only informal exchanges between countries Increasing coordination

  • f activities across RWE

East region and by RWE retail board1 > Institutionalisation of functional coordination > Mainly advisory nature; ultimate decision making still with countries/regions > Case-by-case cooperation Consistent retail steering with clear functional leadership across regions > COO overall responsible for retail, Executive Committee members for individual functions/ segments > Specific KPI-tracking, concepts and initiatives > Regions retain process and profit responsibility Increasing exchange and functionalisation and focus on operational improvements Pre 2011 2011-2015 2016 onwards

A

slide-109
SLIDE 109

page 107 innogy · company presentation · 1 August 2016

Expertise in managing diverse regulatory and competitive environments provides significant benefits

Note: regulation of SME business in some countries is equivalent to regulation of residential consumer business (e.g. UK , BE); not reflected in respective B2B position; Romania and Slovenia not shown. Source: company estimates. 1 # of competitors shown referring to # of competitors jointly representing at least 80% of market volume. 2 Regulatory context taking into account degree of liberalisation (# of segments open for competition, # of segments where end customer price is regulated) and regulatory interventions (special levies and taxes, existence or effort to establish state-owned player).

Retail

Oligopoly [~5] Fully deregulated Regulatory context2 Competitive context1

B2C B2B B2C B2B

Fully regulated

> Certain markets with fast changing regulatory environment > innogy with in-depth experience in various markets in terms of regulation and competition > Enables innogy to react quickly and effectively when markets are further liberalised or when regulation changes > Facilitates entry into new markets and businesses

  • Expansion from CEE to SEE
  • Build and scale up of second commodity business

> Sharing of best practises and experiences with regard to customer needs and new products between countries > Diversification effect from broad portfolio

Medium regulation

Continuum of different regulatory and competitive environments in our markets... …is leveraged to create competitive advantages

Monopoly [1] Polypoly [>10]

A

slide-110
SLIDE 110

page 108 innogy · company presentation · 1 August 2016

Largely stable customer base… Consistent action to limit churn

Actively managed stable and loyal customer portfolio

Retail

1 Rounding differences may occur. 2 Increase predominantly due to first-time full consolidation of VSE with 0.5m customers. 3 Customer satisfaction index, measuring % of customers being ‘very satisfied’ or ‘satisfied’ with the service provided; data collected by multiple external service providers. Underlying methodologies may differ by country and results are mapped into percentage scale to facilitate comparability. Exception: Germany where the score is defined as index value where 0 is the lowest and 100 is the highest score. 4 Change 2014 to 2015 (B2B, B2C equally weighted) in percentage points, except for Germany (see footnote 3). 5 CSAT for East including Czech Republic, Hungary, Poland and Slovakia.

…with high customer satisfaction

Area Measure Customer care

> Customers receive a ‘bill shock-call’ in case of increased annual bills > Proactive up-/cross-selling based on price sensitivity and switching risk scoring (which is based on customer data and behavior, e.g. interaction with the call center) > Keeping the contract and supporting the customer when they move > Automatically adjusting advance payments > Save desk (specifically trained employees)

Product

  • ffering

> Directly re-acquiring customers in the switching process by fixed-term contracts > Offering products targeted on specific/niche segments (e.g. green energy) > Bundling of commodity deliveries with longer-term services > Retention offers for loyal customers

CSAT3 2015 Change4

4 78 +1 78% +4% 69% +4% East5 83% +6%

Retail awards achieved

8.0 8.0 8.1 4.7 4.7 4.7 4.8 4.9 5.4 5.7 5.4 5.0 23.3 22.9 23.2 2013 2014 2015

# customers (m)

Germany NL/BE East UK

2

1

A

slide-111
SLIDE 111

page 109 innogy · company presentation · 1 August 2016 50 235 2013 2015

# new customers (‘000)

139 268 340 122 242 321 261 510 661 2007 2011 2015

Electricity Gas

755 1,006 224 269 151 979 1,275 2007 2011 2015

Electricity Gas

B2C portfolio supported by customer acquisition via second brands and other effective channels

Retail

> Scale up to leading and cost-effective internet-based suppliers (separate brand limiting cannibalisation) > Significant potential to roll out e-channels in other countries > Enabling ‘multi-brand’ play in markets with e.g. tactical pricing of different brands

Rapid customer growth Channel partnerships provide closer access to customers

Partnership in NL

Variety of channels

Own channels

> Sales offices, call centres, website > Used as backbone of channel management, focused on providing high quality in an efficient way

3rd parties

> Price comparison websites, intermediaries > Targets either specific customer segments or customers in specific regions/countries

Partnerships

> Partnerships with direct marketing companies such as impeak and Energie-für-dich > Provide closer access to customers and new acquisition

  • pportunities; used when unique skills of the partner is

needed (e.g. Greenergetic platform for PV sales)

4.7x

# customers (‘000) # customers (‘000)

A

slide-112
SLIDE 112

page 110 innogy · company presentation · 1 August 2016 210 590 2001 2010 2015

# customers (‘000)

470 1 130 2015 2010 2015

# customers (‘000)

1,350 10 300 2015 2010 2015

# customers (‘000)

> Broaden focus by adding second commodity > #2 position achieved within 3 years in gas in Slovakia > Transfer experience to other markets with second commodity potential (e.g. Poland and Croatia) > Capital-light approach to new markets by leveraging existing resources in core countries > Entered Croatia in 2013 by acquiring a boutique player via an earn-out scheme and scaled position up significantly > Further leverage know-how by entering neighbouring markets (e.g. Slovenia and Romania)

Significant track record in second commodity cross-selling… …and in entering new markets

Strong growth track record in second commodity and new markets

Retail

Note: customer numbers are rounded to the nearest 10,000 customers. 1 RWE acquired Essent in 2009, Essent entered Belgian market in 2002. 2 Last year pre-market entry.

Electricity

Belgium1 Czech Republic Croatia Slovakia

Gas Gas Electricity 30 110 2012 2013 2015

# customers (‘000)

2 2

A

slide-113
SLIDE 113

page 111 innogy · company presentation · 1 August 2016 2013 2014 2015 EBITDA (€m) 279 394 583 t/o realised losses in our hedge book (142) – – includes non-materialisation of legal risks – – 81 EBITDA margin 1.4% 2.1% 3.3% Customers (m) 8.0 8.0 8.1 Volume electricity (TWh) 133 130 128 Volume gas (TWh) 90 88 94 B2C share of volume1 24% 20% 20% Churn rate B2C2 12% 13% 12% Customer satisfaction3 n/a 77 78 Up to 3 years 35% 3-10 years 27% More than 10 years 38%

> Fully liberalised with mature and stable regulation > Highly fragmented market > No need to pre-approve tariffs, no limit on number of tariffs > innogy acting as base supplier in its core regions

Germany – home market with strong market positions, loyal customer base and mature regulation

1 B2C share of volume based on total gas and electricity volume. 2 Total customer losses in year divided by the average customer number across the year calculated on the basis of the numbers at the end of each quarter. 3 Customer satisfaction index, measuring % of customers being ‘very satisfied’ or ‘satisfied’ with the service provided; data collected by multiple external service providers. Score is defined as index value where 0 is the lowest and 100 is the highest score. 4 Based on volumes. Source: Company estimates based on public disclosure of peers. 5 Based on electricity customers at RWE brand level as an example. Consolidated data not available. Numbers may not add up due to rounding differences. 6 Areas in which innogy is base supplier are highlighted in the map. 7 Includes marginal areas where only gas is provided as base supply. 8 Rebranding to innogy underway.

Retail

Well established regional and national brands with strong customer loyalty Time with innogy

Loyal customer base supported by strong brands KPIs Market set-up and innogy position

Customer loyalty5

#1

electricity4

#3

gas4

8

Regional and national brands Base supplier6

Electricity base supply7 Both electricity and gas base supply

A

slide-114
SLIDE 114

page 112 innogy · company presentation · 1 August 2016

NL and BE – strong position in NL using multi-channel approach and successful expansion into BE

Retail

2013 2015 Total opex

Efficiency measures

> Multi-brand strategy implementation,

  • incl. the integration of back-offices and

IT platforms > Procurement optimisation reducing external spend > Several restructuring initiatives to reduce personnel costs (e.g. near- shoring services to Poland)

Key business development initiatives

> Fully liberalised > 10 significant players ranging from price-challengers to service focused incumbents > High churn rates in Dutch and Belgian markets Service partners Successful roll-out and growth of second brand Roll-out of partnership as additional sales channel Market access and energy

  • ptimisation

for B2B customers Acquisition

  • f service

partners5 to get access to energy+ customers Market entry and scale up in Belgium

#1

Dutch gas and electricity4

#4

Belgian gas and electricity4

~€40m

2013 2014 2015 EBITDA (€m) 257 191 236 EBITDA margin 4.0% 4.3% 5.6% Customers (m) 4.7 4.7 4.7 Volume electricity (TWh) 23 20 19 Volume gas (TWh) 84 61 62 B2C share of volume1 50% 53% 54% Churn rate B2C2 20% 21% 21% Customer satisfaction3 n/a 74% 78%

Market set-up and innogy position

1 B2C share of volume based on total gas and electricity volume. 2 Total customer losses in one year divided by the average customer number across the year calculated on the basis of the numbers at the end of each quarter. 3 Customer satisfaction index, measuring % of customers being ‘very satisfied’ or ‘satisfied’ with the service provided; data collected by multiple external service providers. Results are mapped into percentage scale to facilitate

  • comparability. 4 Based on customer numbers. Netherlands as of 2014; source: company estimate based on GfK market research, Belgium as of 2015: VREG. 5 Energiewacht NV, Geas Energiewacht BV, Volta Limburg BV.

A KPIs

slide-115
SLIDE 115

page 113 innogy · company presentation · 1 August 2016

526 549 583 2015 2020E 2030E 368 393 426 2015 2020E 2030E

> 3-5 major and (some) smaller players per market > Some markets are fully liberalised (e.g. CZ), most still in liberalisation process or partly regulated > Lower average revenues than in Western Europe due to generally lower grid charge levels > innogy with very high customer satisfaction

East – high increase in demand and further opportunities especially from cross-selling of second commodity

1 Increase predominantly due to effect of first-time full consolidation of VSE company with 0.5m customers. 2 B2C share of volume based on total gas and electricity volume. 3 Total customer losses in one year divided by the average customer number across the year calculated on the basis of the numbers at the end of each quarter. 4 Customer satisfaction index, measuring % of customers being ‘very satisfied’ or ‘satisfied’ with the service provided; data collected by multiple external service providers. Results are mapped into percentage scale to facilitate comparability. Customer satisfaction index East relates to CZ, HU, PL and SK only. 5 Market position as of 2015; Source: OTE, Czech Energy Regulatory Office. 6 #2 in electricity in Croatia (as of 2015; source: company estimates) and Hungary (as of 2014; source: company estimates) and in gas in Slovakia (as of 2014; source: URSO, regulatory body). 7 East including Croatia, Czech Republic, Hungary, Poland, Romania, Slovakia, Slovenia. 8 Mid-point of minimum and maximum ENTSOG scenario forecasts. 9 Numbers are rounded to the nearest 10,000 customers.

Retail

Commodity growth opportunities in existing markets

Countries Customers (‘000, 2015)9 Focus Electricity Gas

Poland 930 <1 > Cross-selling of gas following gas market opening Czech Republic 300 1,350 > Further intensification of cross-selling of electricity Hungary 2,120 <1 > Cross-selling of gas supported by acquisition of customer portfolio(s) Slovakia 470 130 > Further intensification of cross-selling esp. in B2C Croatia 110 <1 > Cross-selling of gas following gas market opening Slovenia <5 – > Growing electricity mainly in B2C Romania <1 <1 > Growing electricity also in B2C, intensification of cross-selling of gas in B2B

Source: ENTSOE as of 2015

Structurally attractive growth market

Electricity demand East7 in TWh Gas demand East7 in TWh (without gas used for electricity generation)

15.8%

KPIs #1

Gas CZ5

#2

in Hungary, Slovakia and Croatia6

Source: ENTSOG (gas demand without gas used for electricity generation)8. 10.8%

2013 2014 2015 EBITDA (€m) 211 190 234 t/o book gain from revaluation after first- time full consolidation of VSE – – 42 EBITDA margin 5.3% 5.6% 6.5% Customers (m) 4.8 4.9 5.41 Volume electricity (TWh) 18 19 20 Volume gas (TWh) 53 46 47 B2C share of volume2 38% 35% 36% Churn rate B2C3 7% 4% 4% Customer satisfaction4 n/a 77% 83%

Market set-up and innogy position A

slide-116
SLIDE 116

page 114 innogy · company presentation · 1 August 2016

UK – recovery plan to address operational difficulties already showing first results

1 Includes (i) net effects of €60m related to charges concerning erroneous and late invoicing, the build-up of provisions for regulatory charges and reviews and the release of provisions for customer paybacks and (ii) net effects of €59m related to billing issues due to changes in revenue estimation. 2 B2C share of volume based on total gas and electricity volume. 3 Total customer losses in year divided by the average customer number across one year calculated on the basis of the numbers at the end of each quarter. 4 Customer satisfaction index, measuring % of customers being ‘very satisfied’ or ‘satisfied’ with the service provided; data collected by multiple external service providers. Results are mapped into percentage scale to facilitate comparability. 5 Market position as of 2015; Source: Cornwall Energy. 6 Source: Ofgem - Supplier performance on consumer complaints (May 2016).

Retail

KPIs #2

electricity5

#5

gas5

> Fully liberalised > Fragmented, 6 large players and numerous mid-sized and smaller players > Regulatory scrutiny (e.g. recently finalised CMA investigation resulting in restrictions on charges to prepayment customers, measures to increase customer engagement, and increased price transparency)

Incoming complaints (‘000s per 100,000 accounts)6

Customer satisfaction improved to best-in-class…

1 3 5 7 9 Q1 13 Q1 14 Q1 15 Q1 16 British Gas (Centrica) EDF E.ON npower (innogy) Scottish Power (Iberdrola) SSE

…with stabilising trend in customer numbers

2013 2014 2015 EBITDA (€m) 366 294 (65) t/o impacts from billing and regulatory issues 8 15 (119)1 EBITDA margin 3.9% 3.1% (0.7)% Customers (m) 5.7 5.4 5.0 Volume electricity (TWh) 48 46 45 Volume gas (TWh) 46 39 40 B2C share of volume2 64% 53% 50% Churn rate B2C3 13% 14% 14% Customer satisfaction4 n/a 65% 69%

Market set-up and innogy position

> Strong first quarter with net customer losses almost coming to a halt > Q2 2016 impacted by expiry of extraordinarily high number of fixed term contracts; positive trend in July 2016

A

slide-117
SLIDE 117

page 115 innogy · company presentation · 1 August 2016

Area Operational controls and management information IT Management of outsource partners and suppliers Customer satisfaction Challenge

> Insufficient controls and lack of information > Unsuccessful integration of IT systems and excessive external spend > Inadequate approach > Customer losses due to poor customer satisfaction

Key measures taken

> New management team and strengthened key departments > Enhanced operational and financial controls > Sharpened commercial focus > Resolution of defects in ERP platform > Enhanced IT capabilities and set-up > Introduction of new system integrator to increase competition and reduce spend > Review of outsourcing partner management and model > Optimisation of relationships with supply chain partners > Customer service process deficiencies addressed > Agile and competitive pricing strategy introduced > Complaints handling enhanced

Leading indicators

453 175 H1-15 H1-16 H1-15 H1-16 97 66 Jun-15 Jun-16

Positive development of leading indicators evidence UK Retail recovery

Retail

While further consistent action is required, measures have started to show meaningful impact

Well on track with meeting commitments with our regulators

(32)% 68 31 H1-15 H1-16 (61)%

Incoming complaints (‘000) Major IT incidents Late bills1 (‘000s)

(54)% (15)%

Spend on outsource partner services

A

1 Revised.

slide-118
SLIDE 118

page 116 innogy · company presentation · 1 August 2016

Fully realised 11% Initiatives completed with impact accruing 25% Approved for implementation 64%

UK Retail – bankable plan and determined actions

1 As of July 2016.

Retail

Implementation status of targeted gross cost savings1 Key targets for 2018

> Targeted gross cost savings of £200m until 2018 approved for implementation

  • Based on more than 220 separate initiatives
  • Initiatives accounting for more than one third of targeted opex savings

already realised or implemented > Additional opex saving initiatives identified and being evaluated > Besides opex savings, meaningful gross margin initiatives targeted based

  • n improved operational performance and customer/stakeholder

satisfaction £200m targeted gross cost savings

Cornerstones of recovery programme targets

Cost base in-line with competitors New commercial offerings and routes to market Consistently high customer satisfaction Positioned for growth: sustainably improved competitiveness

Key opex savings measures

> Reduce customer service spend and bad debt expense > Rationalise project portfolio and renegotiate vendor contracts > Renegotiate and reduce consultancy services > Rationalise support functions > Implement budget cuts and stricter travel policy >⅓ of initiatives already implemented Return to profitability consistent with market potential

A

slide-119
SLIDE 119

page 117 innogy · company presentation · 1 August 2016

innogy adapts to customer needs shifting to more automation and decentralised electricity production

Retail Customer type Product needs Targeted innogy product offering Classic consumer

> Commodities > Fix, flexible > Electricity > Gas

Advanced consumer

> Targeted tariffs > Energy related tools and services (smart, energy efficient) > Insurance/assistance services > Energy audits and savings solutions > Security solutions > Home automation

Prosumer

> Own, decentral production (CHPs, solar, wind) and storage > Customised offers > PV > CHP/Micro CHP > Batteries > O&M services

Energy manager

> ‘Trading’ energy > Optimising energy usage (demand- response)

More customers to produce self- generated power and enabled to manage their consumption, generation and electricity feed-in

A

slide-120
SLIDE 120

page 118 innogy · company presentation · 1 August 2016 ~ 110 > 150 ~ 70 > 100 2015 2018E €m EBITDA OR

 Significant energy+ momentum expected to continue  Heating business and services to contribute a considerable share of the growth

innogy energy+ offering today... ...with strong expected profit growth

Energy+ already constitutes an important part of Retail profitability

Retail

Profitability/positive OR Today Mid-term

Heating businesses and services

Heating CHP O&M services n/a

Basic energy+

Insulation Loyalty cards Energy audits and savings solutions Lighting (LED) Insurance services Security solutions

Prosumer and home energy solutions

Powerhouse Lemonbeat SmartHome Micro CHP PV Batteries

Stable and profitable business based

  • n long-term

customer relationships Flexible and

  • pportunistic

addressing of changing customer needs Addressing upcoming energy-related needs of our customers

B

slide-121
SLIDE 121

page 119 innogy · company presentation · 1 August 2016

> Contracting, maintenance and repair services of mainly B2C heating installations > 246,000 lease contracts > 975,000 service contracts > Contracts range from a minimum of six years for warm water appliances to 12-15 years minimum for boiler rental or leasing > Frequent visits to customers used as channel to promote commodity products and energy+

German heating business¹ Service partner business in the Netherlands

Heating businesses and services – stable business based on long-term customer relationships

Retail

1 Further assets in regional companies.

District heating > Operation of small to medium-scale systems for public supply and subject to regulated prices > More than 110,000 customers > 2,800 MWth installed capacity CHP > Contracting of small to medium-scale installations based on 5-10 years for B2B customers contracts > ~150 installations > 150 MWel installed capacity > Strong pipeline of new projects

Recurring service revenues Intimate customer access with ability to cross-sell Asset-intensive business with attractive returns Stable regulated or quasi-regulated earnings

B

slide-122
SLIDE 122

page 120 innogy · company presentation · 1 August 2016

 Increased retention and new margins by addressing customer needs in convenient way  Leverage on functioning billing processes, strong brand recognition and partnerships

Retail

> Rental of LED bulbs to customers, addressing customer interest in efficient lighting without own investment > Monthly fee of ~ct30-60 charged via energy bill (retention effect)1 > Started in Slovakia in 2014 as a B2C offer, since launch 270,000 LED bulbs rented out > Roll-out to other East countries ongoing. In CZ further 90k bulbs rented out until end of June 2016, in PL 11k bulbs rented out within 4 months since launch > Basic concept now transferred to B2B business > Provision of loyalty card (customer gets discounts at various shops) and additional services, currently including appliance breakage assistance, extended guarantee for electric and gas appliances, and arrangement of medical assistance > Monthly fee of €1.0/month per card and €1.5-6.0/month per additional service, depending on the type of service, charged via energy bill (retention effect) > Started in Slovakia in 2013, more than 160,000 cards and more than 55,000 additional services sold > Extension of additional service offering with new partners

  • ngoing

LED bulbs Loyalty card

1 Depending on the type of bulb. Based on pricelist in the Czech Republic.

Basic energy+ offers – flexible and opportunistic addressing of changing customer needs

B

slide-123
SLIDE 123

page 121 innogy · company presentation · 1 August 2016

Prosumer and home energy solutions – addressing upcoming energy-related needs of our customers

Retail

> Sale of energy management/IT solution for B2B customers with decentral energy generation > Allowing customers to directly access the market and streamline own production and consumption with energy market

  • pportunities

> Powerhouse is a market leader in Dutch horticulture segment… > …and is now making inroads to the segment of large B2Bs, as well as to Spain and USA > Powerhouse contributed €11m/€14m to

  • perating result/EBITDA in 2015

> Sale of central units and devices to B2C customers (product line: SmartHome) > Addressing customer need in optimising production and use of energy and steering other devices > innogy with substantial footprint in market for connected homes: nearly 800,000 SmartHome1 devices and units sold up to 2015 > Roll-out to further countries in preparation > Recently signed a deal with Nest; already more than 30,000 Nest units sold in UK and Netherlands2

Powerhouse Connected Home

> Installations mainly for B2C customers based on sale or lease contracts > One-stop-shop service (incl. design, installation, subsidy application, integration with battery, etc.) > 1,950 installations already in 2015 sold > Acceleration with partners (e.g. Greenergetic) and roll-out to further countries (CZ, PL) ongoing

 Strong footprint in energy management  Leadership in attractive market pockets

(e.g. horticulture)

 Platform for additional revenue streams

(e.g. energy market access and financing solutions)

 Recurring service revenue  Strong footprint in new market area  Customer retention and brand benefits as

innovative company

PV

1 SmartHome devices and units are also sold to end customers through regional companies. Total number also includes devices and units sold to those regional companies. 2 As of 30 June 2016.

B

slide-124
SLIDE 124

page 122 innogy · company presentation · 1 August 2016

innogy is in a front runner position for electric vehicles through leading charging infrastructure

Retail Trusted solution provider for growing network of large corporates

> 1,760 charging systems sold > Overall > 4,900 charging points in > 20 countries1 > More than 100 (municipal) utility and 50 B2B partners > 430,000 charging processes > 4.1GWh electricity charged

Broad coverage of charging points throughout Europe with a focus on Germany

# innogy charging points as of 31 December 2015

NL CH AT PL DN LU UK MT SK HU FR NO RO IT SL HR SR BG TR CZ BE

DE 3,115

<15 50-150 15-50 >150

Key statistics (2015) Current business model

Provision of state-of-the-art hardware Operation of own and partner-owned infrastructure Full back-end solution including access, billing, utilisation monitoring etc.

1 As of 31 Dec 15.

C

slide-125
SLIDE 125

page 123 innogy · company presentation · 1 August 2016

In order to reach ambitious national targets in Germany... ...significant policy support is under way

Ambitious policy targets will propel development of electric vehicles

Retail

1 Government support programme targeting an increase in EVs to 500,000 vehicles (maximum programme duration is 2019). 2 Subsidy for battery electric vehicles with price of less than €60,000; €3,000 for hybrid cars; total subsidy of €1.2bn paid for by government and OEMs in equal parts.

Expansion

  • f charging

infrastructure > Investment of €300m in 15,000 new charging stations until 2020 R&D support > Drive technology > Energy systems and storage > Loading infrastructure and mobility concepts Incentives for EV purchase > Motor vehicle tax exemption extended to 10 years > Subsidy of €4,000 when buying an EV <€60,000 starting in May 20162 > Granting EVs use of special traffic and bus lanes > Special parking for EVs

Reduce CO2 emissions by 40% by 2020 Ambition of 6m EVs by 2030 Increase battery density to 300Wh/l

22,698 24,419 50,000 500,000 2013 2014 2015 Target - Gov support programme

Source: International Energy Agency, Bain (Dec 2015). Source: GTAI (2015).

EV stock Germany

1

Source: KraftStG (tax law for motor vehicles) and EmoG (law for electric vehicles)

C

slide-126
SLIDE 126

page 124 innogy · company presentation · 1 August 2016

1

Well established European player

2

Resilient financials with UK rebound potential

3

Capitalise on development in energy+

4

Grow in heat, prosumer and home energy solutions

5

Build front runner positions to capture future growth

Retail – key takeaways

Retail

Stable

customer base with strong local brands

€1bn

EBITDA 2015

A leading position

in offering charging solutions for electric vehicles

~€110m

energy+ EBITDA 2015

23m

customers in 11 countries1

~2,800MWth

installed heat capacity

~800k

connected home devices sold

4x #1

positions2

£200m

UK cost programme

> €150m

energy+ EBITDA 2018E

1 In terms of electricity and gas retail (electricity and gas contracts counted separately). 2 Market positions based on volumes, or, in the case of Czech Republic, Poland, Netherlands and Belgium, based on customer numbers, as per latest available data, electricity and gas markets counted separately.

slide-127
SLIDE 127

Renewables

slide-128
SLIDE 128

page 126 innogy · company presentation · 1 August 2016

Renewables at a glance

Renewables

1 As of 31 December 2015; pro-rata view, excluding Zephyr portfolio. innogy has further renewable capacity of 0.3GW in consolidated participations related to the Grid & Infrastructure segment. 2 By capacity. Source: Bloomberg New energy finance; asset owner database, as of March 2016. 3 Pro-rata view. 4 Capacity-weighted company estimate for offshore and onshore wind farms subject to an unexpired support tariff for ~1.5GW for onshore and ~1.0GW for offshore; pro-rata view as of 2015, excluding Zephyr portfolio.

Renewables

Significant and diversified renewable portfolio

  • f 3.1GW1 across Europe

Stable financial profile with ~60% quasi-regulated income (2015) and ~12 years average wind support tenor4 Significant pipeline of 0.3GW3 under construction and 4.1GW3 in development Experienced developer and operator; #3 worldwide in offshore wind2

slide-129
SLIDE 129

page 127 innogy · company presentation · 1 August 2016

1 As of 31 December 2015; pro-rata view, excluding Zephyr portfolio. innogy has further renewable capacity of 0.3GW in consolidated participations related to the Grid & Infrastructure segment. 2 Pro-rata view. 3 By capacity. Source: Bloomberg New energy finance; asset owner database, as of March 2016. 4 Capacity-weighted company estimate for offshore and onshore wind farms subject to an unexpired support tariff for ~1.5GW for onshore and ~1.0GW for offshore; pro-rata view as of 2015, excluding Zephyr portfolio.

Well diversified European 3.1GW renewables portfolio with a focus on competitive technologies

Renewables

3.1GW

portfolio1 in operation

~12 years

  • avg. wind

support tenor4

4.1GW

development pipeline2

Installed capacity (MW)1

1,160 901

226

197

459

44 19 34

87

Diversified portfolio with large asset base in Germany and UK… …and a focus on wind and hydro

Germany 37% UK 29% Spain 15% Poland 7% NL 6% Other 6%

By capacity1 By capacity1

0.3GW

under construction2

#3

worldwide

  • ffshore

wind3

Wind Onshore 53% Wind Offshore 31% Hydro 16% Other <1%

Successful

partnership

management

slide-130
SLIDE 130

page 128 innogy · company presentation · 1 August 2016

1 Segment breakdown based on sum of operating segment results (€4.7bn). Total includes €(0.2)bn presented as ‘Other, consolidation’ in the combined financial statements. Numbers might not add up due to rounding differences. 2 Capacity-weighted company estimate for offshore and onshore wind farms subject to an unexpired support tariff for ~1.5GW for onshore and ~1.0GW for offshore; pro-rata view excluding Zephyr as of 2015. For total wind, average remaining regulatory support tenor is ~12 years, for hydro ~12 years based on ~0.1GW assets with unexpired support tariff. Germany offshore based on initial support period of eight years only. 3 Feed-in tariff. 4 Contract for Difference. 5 As of 2015; based on onshore and offshore wind; pro-rata view.

Strong and resilient financial profile through support schemes

Renewables

...with high and increasing quasi-regulated earnings Renewables within innogy…

Quasi-regulated/long-term contracted EBITDA share (2015) Remaining wind regulatory support tenor (2015)  Young asset fleet, only limited wind capacity with expiring support by 20202  Expected increase of quasi-regulated share to 65% from full contribution of newly commissioned assets in 2016  Trend towards FiTs3 and CfDs4 will further increase stability  Average weighted age of wind fleet of ~6 years5

~60%

EBITDA from quasi-regulated earnings

~14 years

average remaining offshore wind regulatory support tenor2

~10 years

average remaining onshore wind regulatory support tenor2 Offshore 6-10 years 11-20 years 1-2 years 3-5 years 6 - 10 years 11-20 years Onshore

61% 21% 17% innogy EBITDA 2015 Renewables Retail Grid & Infrastructure €4.5bn

1

slide-131
SLIDE 131

page 129 innogy · company presentation · 1 August 2016

2,633 2,805 3,280 2013 2014 2015 916 825 1,158 2013 2014 2015 448 524 818 2013 2014 2015

Strong revenue and profit growth from significant investments in the past

Renewables

975 677 404 2013 2014 2015

Capacity

MW, accounting view1

EBITDA

€m

Capex

€m

Total revenues

€m 2,550 2,691 3,129

1 Additionally, in 2013-15 innogy managed a PPA for the UK Zephyr portfolio with a capacity of 256MW, for which innogy earned a management fee; ultimate counterparty of the PPA is the RWE Group. 2 Excluding Zephyr portfolio.

MW pro-rata view2

slide-132
SLIDE 132

page 130 innogy · company presentation · 1 August 2016

0.3 0.9 3.1 Under construction Development close to FID Early development

Solar Hydro Wind Offshore Wind Onshore

UK 57% Germany 16% NL 11% Other 16%

1 Not probability weighted. 2 Commissioning date. 3 Capex including financial investments.

Growing asset base through near-term project pipeline

Renewables

> Key projects under construction include Nordsee One (2017 CoD2), Zuidwester (2017 CoD) and Galloper (2018 CoD) > Current construction pipeline to be fully commissioned by early 2018 > €1.3bn 16E–18E for gross investments into specific projects under construction or close to FID > Additional potential for investments depending on success in auctions > Other including financial investments and day-to-day capex

Construction and development pipeline Significant near-term investments mainly in wind

GW, pro-rata view

2016E-18E capex breakdown3 by generation assets Wind

  • nshore

45-55% Wind

  • ffshore

20-30% Solar 10-15% Hydro <10% Other <10%

Total ~€1.3bn

1 1

Total: 4.4GW

By country, pro-rata view

slide-133
SLIDE 133

page 131 innogy · company presentation · 1 August 2016

> Attractive project pipeline and significant development expertise > innogy with flexible capital approach > Partnership strategy to

  • ptimise risk-return

allocation > Maximise energy yield and availability > Continue to reduce O&M costs > Execute existing construction projects on time, budget and quality > Selective growth by leveraging core competencies and using partnership models > Increase scope for new investment opportunities > Develop skills for solar to enter new technology

Enter new regions and technologies C Optimisation of existing business A Leverage growth opportunities in existing markets B

Renewables to focus on three key strategic areas

Renewables

slide-134
SLIDE 134

page 132 innogy · company presentation · 1 August 2016

Note: figures may not add up due to rounding differences. 1 Pro-rata view, excluding Zephyr, as of 31 December 2015.

Highlights

> Well diversified portfolio in attractive European markets

  • Onshore wind portfolio of more than 1.6GW1 in six countries
  • Top 3 player in offshore wind
  • Highly cash generative hydro business with long remaining lifetime

> Exposure to different support frameworks across Europe > Over 1.3GW commissioned in the last 5 years > Technological and project management expertise > Geographical spread reduces meteorological volatility of earnings

Total 8.3TWh (2015)

Focus on wind and hydro…

Germany 36% UK 34% Spain 12% Netherlands 6% Poland 6% Other 7% Onshore wind 42% Offshore wind 35% Hydro 23% Other 1% By production volume (TWh)1 By production volume (TWh)1

Diversified European portfolio1

Hydro Wind Onshore Wind Offshore

Size of bubbles indicates installed capacity

Solar

…especially in UK and Germany

MW

Significant and diversified renewables portfolio and advanced development skills and capabilities

A

Renewables

slide-135
SLIDE 135

page 133 innogy · company presentation · 1 August 2016

Operation Construction

Business model leverages core competencies at all stages of the value chain

1 Only logos of partners shown.

> Market intelligence, engineering, procurement, financial structuring > Identification and development of promising sites > Profitable sale of projects > Management and delivery of complex projects > Management of project partners and suppliers > Experienced operator > Innovative O&M concepts fit for purpose > Trusted service partner for JVs > Delivery of MW to consent/FID > Hurdle rates per technology and country > IRR > hurdle rate @FID > Delivery on time > Delivery on budget > Delivery on quality > O&M cost per MWh > Availability

Development innogy capabilities KPIs

Partner and stakeholder management1

Renewables

A

slide-136
SLIDE 136

page 134 innogy · company presentation · 1 August 2016

Support scheme ~72% Wholesale price ~28%

Offshore wind – #3 player with significant expertise in delivering projects

> Industry with high barriers to entry due to development and engineering challenges > Significant technological and project management expertise and strong learning track record from completed projects > Well positioned to win auctions with partnership approach optimising risk and return allocation

Highlights 295 585 87

1 By gross profit; gross profit defined as revenues – sales cost. 2 Pro-rata view, excluding Zephyr portfolio, as of 31 December 2015. 3 Excluding Zephyr portfolio. 4 Accounting view excluding Zephyr PPA. Load factor defined as production volume divided by maximum possible volume based on average of capacities at beginning and end of year. 5 Accounting view excluding Zephyr PPA. 6 Net revenues after deduction of transaction costs. Accounting view excluding Zephyr PPA. Zephyr PPA management fee is included in OR/EBITDA.

Key figures 2013 2014 2015 Capacity (MW), pro-rata view3 384 553 967 Capacity (MW), accounting view3 342 511 925 Average load factor4 39% 39% 44% Production volume (GWh)5 1,170 1,469 2,749

  • Avg. revenue (€/MWh)6

163 160 185

Share of quasi-regulated income1

Renewables

A Installed capacity2

MW

~14 years avg. remaining support life2 1.0GW capacity2 Avg. asset age of ~2 years2

slide-137
SLIDE 137

page 135 innogy · company presentation · 1 August 2016

Benefits

Offshore wind – steep learning curve with significantly improved risk-reward proposition

Note: years refer to commissioning date. 1 innogy operatorship or main service provider to JV.

> Multi-contracting approach > Own vessels used > Single lot with few key contracts > Vessels supplier responsibility

Reduces interfaces and complexity > Predominantly corporate level financing > Non-recourse project level financing

Limits capital requirement per project > Ambition and preference to do most projects independently > JVs with experienced financial and strategic players

Provides higher capital diversification, risk sharing and de-biasing

Contracting Approach in the past Current approach Financing Partnering

North Hoyle1 (2004) Rhyl Flats1 (2010) Greater Gabbard (2012) Thornton Bank 1–3 (2009–2013) Gwynt y Môr1 (2015) Nordsee Ost1 (2015) Galloper1 (2018) Nordsee One1 (2017)

Renewables

A

slide-138
SLIDE 138

page 136 innogy · company presentation · 1 August 2016

~13% At FID Equity IRR at FID > 336MW (100%) > 25% each > Commissioning expected by Q1 2018 > ~£1.5bn external facilities > Project financing 30:70 gearing

Galloper – successful value creation through development activities

Capacity Shareholder structure Timing Financing

Facts UK offshore Significant development success

Initial development Internal re- evaluation by innogy

> Original partner decides to refrain from investment > Project development put on hold > Project re-evaluated by innogy > Reconfiguration of central characteristics by innogy, e.g. introduction of larger turbines > Siemens, Macquarie and GIB as new joint equity partners > Significant development gain at financial close achieved Project goes ahead with new partners Internal re-evaluation by innogy Initial development

Further €93m gain from sale at financial close

European Power Deal of the Year

Renewables

A

slide-139
SLIDE 139

page 137 innogy · company presentation · 1 August 2016

Note: WS = Wholesale 1 Part of Zephyr portfolio. 2 Including Thornton Bank 1–3: Thornton Bank 1: 6x5MW (gravity foundation), Thornton Bank 2: 30x6.15MW (jacket foundation), Thornton Bank 3: 18x6.15MW (jacket foundation). 3 Minimum price for offshore wind certificates are €107 per MWh for the first 216 MW of generating capacity, and €90 per MWh for capacity exceeding 216 MW. 4 The level of support is granted for 20 years (subject to a backstop date in 31 Mar 2037). 5 EEG compression model: €194/MWh; €154/MWh; €39/MWh.

Track record of installing bigger turbines, farther from shore and in deeper waters

Nordsee One 2017 332MW 54 x 6.15MW 26-29m depth 45km EEG 20145 Nordsee Ost 2015 295MW 48 x 6.15MW 22-26m depth 60km EEG 20145 North Hoyle1 2004 60MW 30 x 2.0MW 7-11m depth 7 km 1.0 ROC + WS Rhyl Flats 2010 90MW 25 x 3.6MW 10-15m depth 8km 1.5 ROC + WS Gwynt y Môr 2015 576MW 160 x 3.6MW 12-28m depth 13km 2.0 ROC + WS Greater Gabbard 2012 504MW 140 x 3.6MW 24-34m depth 23km 2.0 ROC + WS Thornton Bank 2009-2013 325MW 54 x 5-6.15MW2 12-30m depth 28km WS + Certificate3 Galloper 2018 336MW 56 x 6MW 27-36m depth 30km 1.8 ROC + WS4 Project (Expected) CoD Capacity Turbines Water depth Distance to shore Support scheme Under construction In operation

Renewables

A

Monopile Jacket

slide-140
SLIDE 140

page 138 innogy · company presentation · 1 August 2016

Offshore industry has significantly matured

Source: Company estimates.

> Built first ever commercial UK

  • ffshore wind project in 2003

(North Hoyle), built the second largest fully operational offshore wind farm to date (Gwynt y Môr)3 > Currently constructing 10th project

  • f which innogy has led over half

> Experience, scale and long-standing relationships with the supply chain ensure successful delivery > Robust lessons learnt and sharing

  • f experiences ensure that each

project builds on the success of previous ones

Foundation installation Improvement in installation vessels Significant innogy learning curve

# of foundations completed over time (in days)

~8.2 ~2.3 Nordsee Ost Nordsee One

Average # days for installation per foundation (CoD 2017E) (CoD 2015)

Excalibur

Project North Hoyle Year1 2003 Purpose built  Water depth 20m Crane 250t Length 60m

Jumbo Javelin

Project Greater Gabbard Year1 2010 Purpose built 2 Water depth n/a Crane 900t Length 144m

Innovation

Project Galloper (planned) Year1 2016 Purpose built  Water depth 65m Crane 1,500t Length 150m

1 Deployment period. 2 Heavy load carrier deflected from its normal purpose; built for transporting heavy loads. Therefore, lack of stability in comparison with jack-up barge. 3 As of July 2016.

20 40 60 100 200 300 400 Nordsee Ost (CoD 2015) Nordsee One (CoD 2017E)

Renewables

A

slide-141
SLIDE 141

page 139 innogy · company presentation · 1 August 2016

239 443 34 3 226 506 197

Support scheme ~55% Wholesale price ~45%

1 By gross profit; gross profit defined as revenues – sales cost. 2 Pro-rata view, excluding Zephyr portfolio, as of 31 December 2015. 3 Excluding Zephyr portfolio. 4 Accounting view excluding Zephyr PPA. Load factor defined as production volume divided by maximum possible volume based on average of capacities at beginning and end of year. 5 Accounting view excluding Zephyr PPA. 6 Net revenues after deduction of transaction costs. Accounting view excluding Zephyr PPA. Zephyr PPA management fee is included in OR/EBITDA.

Onshore wind – well experienced operator with >1.6GW portfolio across 7 countries

> Outstanding development and construction skills combined with

  • comprehensive market intelligence
  • value engineering through technological expertise
  • operational excellence by in-house O&M strategies

> Continuous improvement measures to ensure value adding growth within increasingly competitive markets > Best positioned for further international growth

Technological expertise and operational excellence in well-proven technology Installed capacity2

1.6GW capacity2 Avg. remaining support of ~10 years2 Avg. asset age of ~9 years2 Share of quasi-regulated income1

Key figures 2013 2014 2015 Total capacity (MW), pro-rata view3 1,537 1,601 1,648 Total capacity (MW), accounting view3 1,667 1,763 1,823 Average load factor4 24% 23% 25% Total production volume (GWh)5 3,375 3,463 3,887

  • Avg. revenue (€/MWh)6

100 87 91

MW

Renewables

A

slide-142
SLIDE 142

page 140 innogy · company presentation · 1 August 2016

Source: Company estimates. 1 Numbers do not include operational costs like lease, tax etc. 2 Numbers do not include unavailability caused by external impacts like grid curtailment, weather, etc.

Delivering onshore wind projects on time and on budget and achieving cost savings

Track record of delivering construction projects

(15)% (5)% 5% 15% 2011 2012 2014 2015

Over budget Below budget

(6) (4) (2) 2 4 6 8 10 12 14 2011 2012 2014 2015 Delta in time (months)

Behind schedule Ahead of schedule

95.2 96.9 25.2 22.3 > Maintenance optimisation; e.g. maintenance timing based on weather prediction maximises energy yield > Centralisation of engineering team making expertise accessible for complete fleet > Active ownership; in-sourcing of expensive O&M service contracts

Significant reduction in O&M costs while increasing availability

O&M costs1(€/MWh) Time-based availability2(%) 2013 2015 2013 2015

Delivering projects on/below budget… …and on/ahead of schedule

Renewables

A

slide-143
SLIDE 143

page 141 innogy · company presentation · 1 August 2016

Wholesale price ~75% Support scheme ~25%

Hydro – highly cash generative and stable business with low investment needs

1 By gross profit; gross profit defined as revenues – sales cost. 2 Pro-rata view, as of 31 Dec 2015. 3 As of 2015. 4 Accounting view. Load factor defined as production volume divided by maximum possible volume based on average of capacities at beginning and end of year. 5 Accounting view. 6 Net revenues after deduction of transaction costs. Accounting view.

> Well established asset base > Long remaining lifetime and very limited capex requirements > Diversified hydrology exposure > Upside potential if wholesale prices materially rebound

High cash generation and operational excellence 353 77 44 10 16

Share of quasi-regulated income1

Key figures 2013 2014 2015 Total capacity (MW), pro-rata view 521 523 500 Total capacity (MW), accounting view 522 525 525 Average load factor4 50% 46% 42% Total production volume (GWh)5 2,289 2,117 1,944

  • Avg. revenue (€/MWh)6

58 67 65

Renewables

A Installed capacity2

MW 500MW capacity2 ~10% EBITDA contribution to segment3 Long remaining asset lifetime

slide-144
SLIDE 144

page 142 innogy · company presentation · 1 August 2016 EU 2020 target Key national targets > Target of 18% renewable energy share by 20201 > Target of 40%–45% renewable energy share in total electricity consumption until 2025, 55%–60% until 2035 > Exit from nuclear energy until end of 2022 > Source 15% of UK energy from renewable sources by 2020 > RES-E2 target of 30% by 2020 > End of hard coal fired generation by 2025 > Unclear what targets will apply to the UK following the implementation of the Brexit > Target of 14% renewable energy share by 2020 and 16% by 20234 > RES-E target of 37% by 2020 > Discussion to exit coal fired generation > Target of 15% renewable energy share by 20205 > Target of 19% renewables share in electricity production by 2020 Transi- tion to auction regimes > Switch to auctioning starting from 2017 > Pay-as-bid remuneration > From 20173 onwards > CfD auctions only for low carbon projects >5MW > No future auctions currently announced for mature technologies like onshore wind > Individual support levels determined per technology > First come, first serve basis as well as pay-as-bid basis > Separate budget and process based on centralised tender model for offshore wind > New support scheme based

  • n auctions effective since

July 2016 > Separate auctions for seven defined RES categories and for capacity below 1 MW

innogy well positioned in increasingly competitive markets with ambitious national RES growth targets

Source: Eurostat May 2015. 1 IEA Energy Policies of IEA Countries, 2013 Review. 2 Electricity from renewable sources; source: DECC, Third Progress Report on the Promotion and Use of Energy from Renewable Sources for the United Kingdom, January 2016. 3 2018 if the project has secured an RO grace period. 4 IEA, Executive Summary Netherlands, 2014. 5 PwC, Raport: Potencjalna luka w realizacji celu OZE 2020, March 2016.

14% 7% 6% 11% 18% by 2020 15% by 2020 14% by 2020 15% by 2020 RES share in gross final energy consumption (2014) Gap to target achievement for 2020 % of renewables in total energy consumption

Renewables

B Germany UK Netherlands Poland

slide-145
SLIDE 145

page 143 innogy · company presentation · 1 August 2016

UK 54% Germany 14% Poland 12% Netherlands 11% Other 9% UK 70% Germany 18% Netherlands 6% Poland 5% 159 ~500 ~1,100 ~1,750 134 ~450 ~1,750 ~2,300 5 ~250 ~250 298 ~950 ~3,100 ~4,350 Under construction Development close to FID Early development Total Onshore Offshore Hydro Solar

Strong construction pipeline and promising development projects

Note: capacities in Close to FID and Early development categories rounded to nearest 50MW. Numbers may not add up due to rounding differences. 1 Pro-rata capacity. 2 EEG compression model: €194/MWh; €154/MWh; €39/MWh. 3 Includes <25MW hydro.

Key projects under construction

Nordsee 1 Goole 2 Zuidwester Galloper GER UK NL UK

332 35 90 336 15% 100% 100% 25% Q4-17 Q1-17 Q2-17 Q1-18 Feed-in tariff (EEG 20142) 0.9 ROC SDE+ €80/MWh 1.8 ROC

Country Technology Full capacity (MW) innogy stake Expected CoD Support scheme

Development projects country split

Capacity, pro-rata (MW)

Offshore Onshore

MW1 1 2 1 Close to FID Early development 3 2 3

Onshore Offshore

Renewables

B

3

~50

slide-146
SLIDE 146

page 144 innogy · company presentation · 1 August 2016

Kaskasi Grimmen- Papenhagen

innogy actively positions itself for upcoming auctions

1 As of July 2016. 2 Statkraft announced in Dec 2015 that they will continue with the development of Triton Knoll, but not invest any further into offshore wind projects.

> Onshore > Onshore > Onshore > Offshore > Offshore > 96MW > 33.6MW > 26MW > 900MW > 210-280MW > Q1 2015 > Successful participation > Q1 2015 > Successful participation > Q3 2017 > 20172 > 2017 > UK CfD auction > UK CfD auction > FiT (EEG 2017) > UK CfD auction > Wind offshore act/ EEG 2017

Technology Size (100%) Auctioning process

 Only utility so far to have won onshore CfD auction in UK1

 Strict observance of investment

criteria

 Partnering helping to de-bias

assumptions Clocaenog Mynydd y Gwair Triton Knoll

(Expected) Auction timing  Operational synergies from scale  Regional and technological

diversification

 Patience and perseverance

Factors to succeed in upcoming auctions

B

Renewables

slide-147
SLIDE 147

page 145 innogy · company presentation · 1 August 2016

Source: company estimates. 1 Post-tax project IRRs at FID. Note: Projects since 2011. Wind Offshore UK including Greater Gabbard and Gwynt y Môr; Galloper not included as only equity IRR available; Wind Offshore Germany including Nordsee Ost. Wind Onshore including four projects in UK, eight projects in Germany, four projects in NL and five projects in Poland. Simple average of project returns.

Strict investment criteria to focus on value creation

Investment framework – hurdle rate build-up

Base renewables WACC 4.50% Minimum value contribution for new projects 0.75% Risk premia Technology risk Construction risk Regulatory risk 0.50% – 3.50% Country risk premium 0.00% – 7.00% Project specific hurdle rate (Project WACC) 5.75%+

 Strict investment framework with conservative hurdle rates  Project specific IRRs at FID generally well above prevailing hurdle rates  Project specific hurdle rates determined by adjusting renewables base WACC for risk premia and minimum value contribution

Attractive returns from recent projects (average project IRRs¹)

Wind Offshore Wind Onshore ~9% ~9% ~7% ~8% ~11% ~11%

GER UK GER PL UK NL

Investment criteria B

Renewables

slide-148
SLIDE 148

page 146 innogy · company presentation · 1 August 2016

> Technology expected to become highly cost competitive > Business model comparable to onshore wind with similar required skill set > Short construction period and limited risks > Low technological complexity > Leverage existing capabilities > Cooperation with local and financial partners > Brownfield approach to accelerate market entry > Build-up of skills and capabilities > Utility-driven approach to asset management and commercialisation (e.g. system integration/storage) Very large market with strong growth potential, resource availability and government support Growth potential, excellent meteorological conditions and demand for capacity Natural expansion of existing UK market

Development of growth optionality through selective and prudent new market entry

Note: US = United States, TR = Turkey, IE = Ireland.

innogy priorities for new market entry Rationale Approach

Wind Onshore in new markets Solar

TR US IE

C

Renewables

slide-149
SLIDE 149

page 147 innogy · company presentation · 1 August 2016

Spotlight onshore wind in the US – leverage capabilities in familiar conditions and profit from growth potential

Source: US EIA, Annual Energy Outlook 2016. Reference case. 1 Production tax credit. 2 Levelised cost of electricity.

...with considerable wind energy potential… Attractive market framework in the US...

> Focus on Northeastern US where environmental conditions, risk profile and process set-up is very similar to Europe > innogy’s sophisticated engineering is capable to maximise output

  • f small parks with high environmental requirements

> Existing experience in cooperations with local partners is valuable to source initial projects > Medium-term build-up of own development capabilities > Leverage innogy's onshore expertise and centralised operational functions, such as engineering and O&M

…and significant expected growth innogy approach in the US

> Attractive support framework > Renewable portfolio standards in several states > PTC1 framework extended until 2020 > Availability of long-term PPAs for wholesale price components > Strong legal protection Significant wind potential due to requirements in space and elevated level of wind speed Wind capacity growth US (GW) 74 142 2015 2030E > Very low LCOEs2 in international comparison, also compared to conventional power generation > Ageing coal plants need to be replaced

Wind speed

(m/s) >10.0 10.0 9.5 9.0 8.5 8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5 <4.0

C

Renewables

4% CAGR

slide-150
SLIDE 150

page 148 innogy · company presentation · 1 August 2016 ~130 ~55 Solar PV LCOE 2015 2025E

Solar – competitive technology becoming a utility game with significant growth potential

1 Source: IRENA – The Power to Change: Solar and Wind Cost Reduction Potential to 2025 (June 2016). 2 Global average utility-scale LCOE of solar PV. 3 Source: Fraunhofer ISE – Photovoltaics Report, updated: 6 June 2016. 4 Source: REN21, Global Renewables Status Report 2016. 5 Engineering, procurement, construction, installation.

Onshore skills can be leveraged LCOE reductions1 Significant growth is expected

PV global capacity3 GW PV share of global renewable capacity additions (2015)4 242 540 2015 2019E PV 34%

> Significant innogy experience in setting up large projects > Experience in site selection, gaining consents and managing stakeholders > EPCI5 approach for project delivery > Significant project management to be leveraged > Extensive procurement and claim management expertise > Solar PV generally with limited overall technological complexity > Active asset management to maximise value

  • Central control room and remote operations supervision
  • Centralised engineering and performance management

> Limited and relatively straight forward maintenance requirements Development Construction Operation

Global solar LCOE2, 2015 vs 2025E USD/MWh 147GW Bid as low as USD 30/MWh in solar PV auction in Dubai in May 2016

C

Renewables

(58)%

slide-151
SLIDE 151

page 149 innogy · company presentation · 1 August 2016

1

Well diversified European renewables portfolio

2

Resilient quasi-regulated earnings set to grow further

3

Business model generating value throughout the value chain

4

High quality assets under construction and strong pipeline

5

New growth optionality through selective new market entry

Renewables – key takeaways

1 As of 31 Dec 2015; pro-rata view, excluding Zephyr portfolio. innogy has further renewable capacity of 0.3GW in consolidated participations related to the Grid & Infrastructure segment. 2 By capacity. Source: Bloomberg New energy finance; asset owner database, as of March 2016. 3 Capacity-weighted company estimate for offshore and onshore wind farms subject to an unexpired support tariff for ~1.5GW for onshore and ~1.0GW for offshore; pro-rata view as of 2015. 4 2015 includes capital gains of sale of Gwynt y Môr network infrastructure and of stakes in Galloper. 5 Includes long-term contracts. 6 Onshore wind 2013-2015. 7 Pro-rata view. 8 Pro-rata view, includes projects close to FID.

0.3GW7

under construction

4.1GW8

total pipeline

~12yrs

  • avg. wind

support tenor3

#3

worldwide in

  • ffshore wind2

3.1GW1 ~1.8x

EBITDA growth 2013-20154

~60%

quasi-regulated5 EBITDA share in FY15A

83%

  • f projects on time

and on budget6

Strong track record

in offshore wind

Leverage existing capabilities High growth potential Renewables

slide-152
SLIDE 152

Wrap-up

slide-153
SLIDE 153

page 151 innogy · company presentation · 1 August 2016

innogy offers a compelling value proposition

Wrap-up

Platform for growth Focus on value creation Resilient financial profile Stable business Unique European asset base

1 2 3 4 5

Capitalise on evolving energy system

slide-154
SLIDE 154

page 152 innogy · company presentation · 1 August 2016

Unique European asset base anchored in Germany, leading positions across many countries Stable business well invested to yield largely regulated and predictable returns Resilient financial profile backed by strong cash generation and solid capital structure Solid platform for growth driven by

  • perational excellence supported by

IPO proceeds Focus on value creation

~60%

share of regulated3 EBITDA

€13.3bn

total RAB1

3.6GW

renewables capacity2

23m

customers

+9% increase

expected for German RAB1

~70%

CFOA4/EBITDA (average 2013-15)

Strict capital discipline 70-80%

dividend pay-out ratio based on adjusted net income Focus on further

efficiencies ~€6.5bn capex5

(2016-18E) Set for

mid-term growth ~4.0x

target leverage net debt/EBITDA

Wrap-up

4 1 2 3 5

1 Numbers based on latest notification by regulator or based on calculations in latest filings with regulators. Expected increase in German regulated asset base calculated as RAB 2010/2011 plus net investments (post concession gains/losses) in regulated assets in the years 2010/2011 to 2015/2016E, assuming full recognition by the regulator. Generally, RABs from different regulatory regimes are not directly comparable due to significant methodological differences (e.g. regulatory periods, regulatory depreciation periods). Also, throughout this presentation, RABs are always stated excluding pro-rata share of RAB from participations that are not fully consolidated. 2 As of 31 December 2015; accounting view; includes 3.3GW from Renewables segment (excluding Zephyr portfolio) and 0.3GW renewables capacity from participations related to the Grid & Infrastructure segment. 3 Includes regulated and quasi-regulated business activities. 4 Cash flow from operating activities after interest and tax. 5 Including financial investments.

innogy’s key characteristics – large and stable business with attractive growth prospects

slide-155
SLIDE 155

Appendix

slide-156
SLIDE 156

page 154 innogy · company presentation · 1 August 2016

Senior bond maturity profile (€bn)1 Intercompany loans from RWE AG

Solid, long-term capital structure with limited short-term maturities

1 Refers to senior bonds issued by RWE Finance B.V. and RWE Finance II B.V. 2 Based on weighted average coupon on senior bonds.

Balanced profile with a total outstanding amount

  • f senior bonds of ~€11bn (as per 31 Dec 2015),

and average coupon of ~5% > Senior intercompany loans from RWE AG to innogy > Established in June 2016 > Update to be provided upon release of innogy H1 financials

Cumulated maturities of senior bonds

as of 31 Dec 2015 2016-2018 2019-2021 2022-2024 Post 2024

Senior bonds¹ 1.8 3.5 2.1 3.8 % of total senior bonds² 16% 31% 19% 34%

~5% weighted

  • avg. interest
  • n senior

bonds2

0,0 2,0 4,0 6,0 8,0 10,0 12,0 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 2016 2017 2018 2019 2020 2021 2022 2023 2024 Post 2024 Repayment of senior bonds Total senior bonds

Appendix – Financials

slide-157
SLIDE 157

page 155 innogy · company presentation · 1 August 2016

Overview of senior bonds of innogy as of 18 Dec 2015

1 Notional-weighted coupon average. Conversion of GBP bonds as per 31 Dec 2015 FX rate. 2 Market-value weighted YTM average. 3 Note that €600m senior bond was transferred into innogy scope as per 28 Dec 2015 only.

Issuer Notional amount (million) Carrying amount pre-transfer (€m) (18 Dec 2015) Market value (€m) (18 Dec 2015) Coupon (%) Yield-to-maturity (18 Dec 2015) Maturity Fair value ‘step-up’ (€m)

RWE Finance B.V. EUR 850 850 867 6.25% 0.14% Apr 16 16 RWE Finance B.V. EUR 980 980 1,098 5.125% 0.43% Jul 18 119 RWE Finance B.V. EUR 1,000 996 1,174 6.625% 0.92% Jan 19 178 RWE Finance B.V. EUR 750 746 772 1.875% 1.14% Jan 20 26 RWE Finance B.V. GBP 570 778 888 6.50% 3.53% Apr 21 110 RWE Finance B.V. EUR 1,000 998 1,262 6.50% 1.60% Aug 21 264 RWE Finance B.V. GBP 500 677 752 5.50% 3.71% Jul 22 75 RWE Finance B.V. GBP 488 663 732 5.625% 4.11% Dec 23 69 RWE Finance B.V. EUR 800 800 853 3.00% 2.10% Jan 24 52 RWE Finance B.V. GBP 760 1,038 1,152 6.25% 5.14% Jun 30 114 RWE Finance II B.V.3 EUR 600 595 741 5.75% 3.79% Feb 33 145 RWE Finance B.V. GBP 600 813 761 4.75% 5.35% Jan 34 (52) RWE Finance B.V. GBP 1,000 1,342 1,471 6.125% 5.51% Jul 39 129 Total 11,276 12,522 ~5%1 ~3%2 1,245 €12,513m as per combined financial statements (as of 31 Dec 2015)

Appendix – Financials

slide-158
SLIDE 158

page 156 innogy · company presentation · 1 August 2016

Grid & Infrastructure – stable regulatory returns and

  • perational excellence

1 Income from not fully consolidated participations. 2 Capex excluding financial investments.

Grid & Infrastructure Comments

EBITDA Development > Slight increase in 2015 with increase in G&I East over-compensating decrease in G&I Germany

  • Decrease in Germany mainly driven by lower earnings from

disposal of grid assets, one-off book gains in 2014 from sale of LEW to Amprion, higher grid maintenance costs and restructuring costs related to early retirement scheme

  • Increase in East 2015 mainly driven by revaluation gain from the

first-time full consolidation of VSE, improved weather and regulatory conditions for Czech gas distribution > Increase in 2014 driven by an increase in G&I Germany partially

  • ffset by a decrease in G&I East

> Increase of D&A in 2014 and 2015 mainly driven by impairment charges on gas storage assets in Germany and first-time full consolidation of VSE in East Capex > Strong increase in 2015 driven by grid infrastructure optimisation investments and first-time full consolidation of VSE > Capex continuously and significantly above D&A in all years supporting RAB growth € million 2013 2014 2015

EBITDA 2,790 2,861 2,878 t/o operating income from investments1 299 301 294 Operating D&A (852) (957) (948) Operating result 1,938 1,904 1,930 Capex2 1,117 1,131 1,305 Capex/operating D&A 1.3x 1.2x 1.4x EBITDA – capex 1,673 1,730 1,573

Appendix – Financials

slide-159
SLIDE 159

page 157 innogy · company presentation · 1 August 2016

Retail – overall favourable development burdened by UK

  • perational issues

1 Excluding financial investments.

Retail

EBITDA Development > Decrease in EBITDA from 2013 to 2015 mainly driven by a €431m decline of our UK EBITDA, primarily as a result of process- and system-related billing issues – recovery now well on track > Increasing EBITDA excluding UK

  • Germany with strong increase in 2015 mainly due to

release of provisions. 2013 EBITDA adversely affected by realised losses in our hedge book

  • NL/BE EBITDA affected by adverse weather conditions

in 2014

  • East EBITDA with increase in 2015 primarily due to re-

valuation effect from first-time full consolidation of VSE. 2014 EBITDA affected by adverse weather conditions and stronger competition Capex > Low capex intensity > Capex mainly related to UK due to structurally different requirements for investments in IT and infrastructure € million 2013 2014 2015 EBITDA 1,113 1,069 988 Operating D&A (182) (162) (158) Operating result 931 907 830 Capex¹ 158 212 287 Capex Intensity (Capex/EBITDA) 14 % 20 % 29 % EBITDA – capex 955 857 701

Comments

Appendix – Financials

slide-160
SLIDE 160

page 158 innogy · company presentation · 1 August 2016

Overview of special EBITDA items

Appendix – Financials € million 2013 2014 2015

Grid & Infrastructure Germany Book gains from grid disposals 63 187 153 Grid & Infrastructure East Book gain from revaluation after first-time full consolidation of VSE 143 Retail Germany1 Realised losses in our hedge book under IFRS accounting (142) Retail East Book gain from revaluation after first-time full consolidation of VSE 42 Retail UK Impacts from billing and regulatory issues 8 15 (119)2 Renewables Gain on Galloper disposal 93 Gain on Gwynt y Môr OFTO assets disposal 30 Triton Knoll disposal (deconsolidation profit/premium) 9 Income from Nordsee Ost claims 103 12 Losses from development projects UK (20) (4) (27)

1 Retail Germany in 2015 includes provision releases, mainly in the amount of €81 million for legal risks in connection with customer supply contracts. 2 Includes (i) net effects of €60 million related to charges concerning erroneous and late invoicing, the build-up of provisions for regulatory charges and reviews and the release of provisions for customer paybacks and (ii) net effects of €59 million related to billing issues due to changes in revenue estimation.

slide-161
SLIDE 161

page 159 innogy · company presentation · 1 August 2016

Regulation Czech Republic

Appendix – Grid & Infrastructure - East Regulatory model overview

Element Key feature Comments General Current regulatory period 2016-2018 Next regulatory period: 2019-2024 (expected) Type of regulation Revenue cap Revenue cap with certain limitation in max. tariff increase y/y Incentive elements in regulatory framework  Opex outperformance on behalf of distribution company RAB/WACC Regulated asset base (RAB) €1.6bn RABt = RABt-1 + capext – k * allowed depreciationt where k = RABt-1/(revaluated) net book valuet-1 (RAB partially revaluated. Depreciation for assets procured <2007 revaluated, depreciation for assets >2006 not revaluated. Working capital, assets under construction not included in RAB) Regulatory WACC (pre-tax) 7.94% Nominal, fixed for the entire fourth regulatory period Regulatory opex treatment Efficiency factor1  Allowed opex based on 2012/2013 average, efficiency factor 1,01% Pass-through of financing costs  Debt financing costs considered in WACC Other Regulation of quality of supply  No SAIDI or SAIFI applied Exposure to volume risk  Deviations between allowed revenues and actual revenues which are caused by deviations between actual and planned consumption volumes are reimbursed in year +2 Inflation2  Opex indexation = 70% market service index + 30% CPI with 1% bonus Compensation for investments  Capex is considered in RAB as planned value in the relevant year, deviations to Actuals are corrected via k-factor in year + 2

1 Efficiency factor reflects elements of individual as well as industry/macro-related productivity components. 2 Inflation effects considered in regulatory revenues.

slide-162
SLIDE 162

page 160 innogy · company presentation · 1 August 2016

Regulation Hungary

Appendix – Grid & Infrastructure - East

Element Key feature Comments General Current regulatory period 2013-2016 Next regulatory period: 2017-2020 (expected) Type of regulation Price cap Regulated revenue is the sum of the acknowledged values of capital costs (RAB times WACC) plus opex plus depreciation plus grid losses, adjusted by additional factors Incentive elements in regulatory framework  When determining the value of acknowledged costs the regulator lowers the level of cost reduction for DSOs that perform better, DSOs not performing up to standard have to give a specified discount on distribution tariffs RAB/WACC Regulated asset base (RAB) €0.9bn RAB = gross re-evaluated value * aging – (net value of foreign sources) The value of RAB is adjusted separately each year by inflation and efficiency factor Regulatory WACC (pre-tax) 6.23%¹ WACC is real value. The (theoretical) nominal WACC value would be 7.3% for 2015 and 8.53% for 2016 Regulatory opex treatment Efficiency factor2  CPI-X method, X: required efficiency improvement factor Pass-through of financing costs3  Debt financing costs are considered in WACC Other Regulation of quality of supply  Taken into account during the benchmarking by the regulator Exposure to volume risk3  Volume changes are taken into account by the yearly tariff regulation Inflation4  CPI-X (customer price index decreased by the required efficiency improvement factor). In the current regulatory period this adjustment was not applied regularly due to low level of inflation Compensation for investments  Depreciation + bonus/malus system

1 Corresponds to real WACC, RAB for Hungary includes annual inflation adjustment. 2 Efficiency factor reflects elements of individual as well as industry/macro-related productivity components. 3 Revised. 4 Inflation effects considered in regulatory revenues.

Regulatory model overview

slide-163
SLIDE 163

page 161 innogy · company presentation · 1 August 2016

Regulation Poland

Appendix – Grid & Infrastructure - East

Element Key feature Comments General Current regulatory period 2016-2020 Next regulatory period: 2021-2025 (expected) Type of regulation Price cap Each year the regulator sets distribution charges via setting up the regulated revenues and dividing it into fixed prices Incentive elements in regulatory framework  Efficiency increase of opex and network losses set up for entire regulatory period. Quality parameters without any bonus, tariff effective from 2018 RAB/WACC Regulated asset base (RAB) €0.7bn RAB is calculated based on starting value agreed with regulator and adjusted yearly (current value) RABt = RABt-1 +investmentst-1– depreciationt-1 – connection feest-1 – non refundable sourcest-1 - ∆ (I, C, N)t-2 Regulatory WACC (pre-tax) 5.675%1 WACC is nominal value. Tendency: slightly decreasing risk free rate Regulatory opex treatment Efficiency factor2  Individual (based on benchmark), sector (set up by the regulator) Pass-through of financing costs  Other Regulation of quality of supply  Exposure to volume risk  Inflation3  Only opex and some minor additional revenues Compensation for investments  Before investments become part of RAB: compensation via depreciation (2% of current annual investment value), after 1 year capex = RAB

1 Nominal WACC numbers confirmed for 2016; following years to be adjusted according to risk free rate development. 2 Efficiency factor reflects elements of individual as well as industry/macro-related productivity components . 3 Inflation effects considered in regulatory revenues.

Regulatory model overview

slide-164
SLIDE 164

page 162 innogy · company presentation · 1 August 2016

Regulation Slovakia

1 WACC for 2016. 2 Efficiency factor reflects elements of individual as well as industry/macro-related productivity components. 3 Inflation effects considered in regulatory revenues.

Appendix – Grid & Infrastructure - East

Element Key feature Comments General Current regulatory period 2012-2016 Next regulatory period: 2017-2021 (expected) Type of regulation Price cap Main: opex, reg. depreciation, allowed profit (RABxWACC), distribution volumes Secondary: core inflation, efficiency factor, coefficient of disposable funds utilisation,

  • ther revenues

Incentive elements in regulatory framework  No revenue correction. Outperformance on individual elements can be retained. Incentive scheme on losses RAB/WACC Regulated asset base (RAB) €0.5bn Assets from revaluation done by Regulator as per 2005, later updated as per 2010. Currently undergoing revaluation for next regulatory period Regulatory WACC (pre-tax) 6.12%¹ WACC is real value. Proposal for next regulatory period: 6.47% Regulatory opex treatment Efficiency factor2  Efficiency factor – 3.5% Pass-through of financing costs  Other Regulation of quality of supply  Quality factor – not applicable, but automatic compensations in place Exposure to volume risk  Actual revenues depend on actual volumes, while price cap on planned Inflation3  Opex escalated by core inflation minus efficiency factor. If negative, then no reduction

  • ccurs

Compensation for investments  One-off increase of regulated depreciation for the year following the completion of

  • investments. Lag for introduction into RAB  until next reg. period.

Regulatory model overview

slide-165
SLIDE 165

page 163 innogy · company presentation · 1 August 2016

KPIs by region (1/2)

1 B2C share of volume based on total gas and electricity volume. 2 Total customer losses in year divided by the average customer number across one year calculated on the basis of the numbers at the end of each quarter. 3 Customer satisfaction index, measuring % of customers being ‘very satisfied’ or ‘satisfied’ with the service provided; data collected by multiple external service providers. Underlying methodologies may differ by country and results are mapped into percentage scale to facilitate comparability. Exception: Germany where the score is defined as index value where 0 is the lowest and 100 is the highest score.

Appendix – Retail

Germany

Key financials 2013 2014 2015 Total revenue (€m) 19,390 18,472 17,653 External revenue (€m) 18,873 18,079 17,301 EBITDA (€m) 279 394 583 t/o realised losses in our hedge book (142) – – includes non-materialisation of legal risks – – 81 EBITDA margin 1.4% 2.1% 3.3% OR (€m) 255 358 545 OR margin 1.3% 1.9% 3.1% Capex (€m) 29 46 53 Key financials 2013 2014 2015 Total revenue (€m) 6,342 4,498 4,241 External revenue (€m) 6,341 4,498 4,241 EBITDA (€m) 257 191 236 EBITDA margin 4.0% 4.3% 5.6% OR (€m) 198 138 194 OR margin 3.1% 3.1% 4.6% Capex (€m) 14 9 25

Netherlands and Belgium

Operational KPIs 2013 2014 2015 Customers (m) 4.7 4.7 4.7 Volume electricity (TWh) 23 20 19 Volume gas (TWh) 84 61 62 Volume – B2C share1 50% 53% 54% Churn rate B2C2 20% 21% 21% Customer satisfaction3 n/a 74% 78% Operational KPIs 2013 2014 2015 Customers (m) 8.0 8.0 8.1 Volume electricity (TWh) 133 130 128 Volume gas (TWh) 90 88 94 Volume – B2C share1 24% 20% 20% Churn rate B2C2 12% 13% 12% Customer satisfaction3 n/a 77 78

slide-166
SLIDE 166

page 164 innogy · company presentation · 1 August 2016

KPIs by region (2/2)

1 Increase due to effect of full first-time consolidation of VSE company with 0.5m customers. 2 B2C share of volume based on total gas and electricity volume. 3 Total customer losses in year divided by the average customer number across one year calculated on the basis of the numbers at the end of each quarter. 4 Customer satisfaction index, measuring % of customers being ‘very satisfied’ or ‘satisfied’ with the service provided; data collected by multiple external service providers. Underlying methodologies may differ by country and results are mapped into percentage scale to facilitate comparability. 5 Includes (i) net effects of €60m related to charges concerning erroneous and late invoicing, the build-up of provisions for regulatory charges and reviews and the release of provisions for customer paybacks and (ii) net effects of €59m related to billing issues due to changes in revenue estimation.

East

Key financials 2013 2014 2015 Total revenue (€m) 9,396 9,454 9,561 External revenue (€m) 9,332 9,375 9,552 EBITDA (€m) 366 294 (65) t/o impacts from billing and regulatory issues 8 15 (119)5 EBITDA margin 3.9% 3.1% (0.7)% OR (€m) 290 227 (137) OR margin 3.1% 2.4% (1.4)% Capex (€m) 106 148 189

UK

Operational KPIs 2013 2014 2015 Customers (m) 5.7 5.4 5.0 Volume electricity (TWh) 48 46 45 Volume gas (TWh) 46 39 40 Volume – B2C share2 64% 53% 50% Churn rate B2C3 13% 14% 14% Customer satisfaction4 n/a 65% 69% Operational KPIs 2013 2014 2015 Customers (m) 4.8 4.9 5.4 Volume electricity (TWh) 18 19 20 Volume gas (TWh) 53 46 47 Volume – B2C share2 38% 35% 36% Churn rate B2C3 7% 4% 4% Customer satisfaction4 n/a 77% 83% Key financials 2013 2014 2015 Total revenue (€m) 4,007 3,394 3,612 External revenue (€m) 3,795 3,193 3,397 EBITDA (€m) 211 190 2341 t/o book gain from revaluation after first- time full consolidation of VSE – – 42 EBITDA margin 5.3% 5.6% 6.5% OR (€m) 188 184 228 OR margin 4.7% 5.4% 6.3% Capex (€m) 9 9 20

Appendix – Retail

slide-167
SLIDE 167

page 165 innogy · company presentation · 1 August 2016

Projects under construction1

Appendix – Renewables

Project Country Technology Installed capacity (MW) innogy stake Pro rata capacity (MW) Assumed COD Support scheme Batsworthy UK Onshore 18 100%2 182 Q2 2016 n/a2 Kattenberg NL Onshore 10 100% 10 Q2 2016 FiT/FiP/CfD (SDE+, €80/MWh) Cia Aig UK Hydro 3 100% 3 Q2 2016 FiT/Wholesale3 Goole 2 UK Onshore 35 100% 35 Q1 2017 WS+Certificate (0.9 ROC) Sommerland 2 GER Onshore 6 100% 6 Q1 2017 FiT/FiP/CfD (EEG €84.5/MWh) Grudie UK Hydro 2 100% 2 Q1 2017 FiT/Wholesale4 Zuidwester NL Onshore 90 100% 90 Q2 2017 FiT/FiP/CfD (SDE+, €80/MWh) Nordsee One GER Offshore 332 15% 50 Q4 2017 FiT/FiP/CfD (EEG 2014)5 Galloper UK Offshore 336 25% 84 Q1 2018 WS + Certificate (1.8 ROC) Total 832 298

Note: WS = Wholesale, FiT = Feed-in tariff, FiP = Feed-in premium, CfD = Contract for Difference. Figures may not add up due to rounding differences. A biogas plant in Bergheim-Paffendorf producing 7.4 MWth (corresponding to 3 MWel) is also under construction with expected completion in Q3-16 and a 100% innogy stake. As a thermal power plant it has not been included in the overall figure for the construction pipeline. 1 Construction pipeline as of year-end 2015. 2 Build to sell. 3 GenSet I (2MW): £125/MWh until 2036, increases annually with RPI (Retail Price Index), plus wholesale power sold in the market , Genset 2 (1MW): wholesale. 4 £100/MWh until 2037, increases annually with RPI , plus wholesale power sold in the market. 5 EEG compression model: €194/MWh; €154/MWh; €39/MWh.

slide-168
SLIDE 168

page 166 innogy · company presentation · 1 August 2016

Regulatory regimes and frameworks in innogy core markets

Appendix – Renewables

Germany United Kingdom Onshore > Support mechanism: statutory feed-in tariff/feed-in premium system in transition to feed-in premium system based on auctioning > Remuneration: wholesale price plus premium to reach fixed tariff level. Increased starting tariff (8.90 ct/kWh1) for a period depending on asset energy yield, then base tariff (4.95 ct/kWh1) – both depending on commissioning date (tariff degression) > Auctions: switch to auctioning from 2017, pay as bid remuneration with correction factor based on energy yield > Support mechanism: Renewable obligation/green certificate (RO) system in transition to feed-in premium system based on auctioned contracts for difference (CfD). Statutory feed-in tariff for small-scale generation (<5MW) > Remuneration: RO: wholesale price plus 0.9-1.0 ROC/MWh, CfD: wholesale price plus premium to reach individual ‘strike price’, feed-in tariff incl. export tariff (9.24-13.30 p/kWh, July 2016) for small scale (<5 MW) > Auctions: from 20172, only CfD auctions for low carbon projects >5MW, but no future auctions currently announced for mature technologies like onshore wind Offshore > Support mechanism: statutory feed-in tariff/feed-in premium system in transition to feed-in premium system based on auctioning > Remuneration: whole sale price plus premium to reach fixed tariff level. Increased starting tariff (15.40 ct/kWh1 / 19.40 ct/kWh1) for a period depending on distance to shore / water depth, then base tariff (3.90 ct/kWh1) – both depending on commissioning date (tariff degression) > Auctions: switch to auctioning from 2017, interim auction model for installations 2021-2024, then centralised tender model, pay as bid remuneration > Support mechanism: Renewable obligation/green certificate (RO) system in transition to feed-in premium system based on auctioned contracts for difference (CfD). Feed-in tariff not applicable > Remuneration: RO: wholesale price plus 1.8 – 2.0 ROC/MWh, CfD: wholesale price plus premium to reach individual ‘strike price’ > Auctions: from 20172 only CfD auctions for low carbon projects >5 MW

1 For assets commissioned in 2014. Operators can opt for a so called compressed tariff model with higher starting tariff for a shorter period. 2 2018 if the project has secured an RO grace period.

slide-169
SLIDE 169

page 167 innogy · company presentation · 1 August 2016

Regulatory regimes and frameworks in innogy core markets

Appendix – Renewables

Netherlands Poland Onshore > Support mechanism: feed-in premium system based on auctioned contract for difference > Remuneration: wholesale price plus premium to reach fixed support level1 (max .70-114 €/MWh in spring 20162) > Auctions: individual support levels are determined per technology in different rounds on a first come, first serve basis as well as on a pay-as-bid basis > Support mechanism: green certificates system in transition to feed-in premium based on auctioned contract for difference > Remuneration: Wholesale price plus one certificate per MWh (2015: average certificate price €29.42, substitution fee €71.78), auction: wholesale price plus premium to reach individual bid level > Auctions: New support scheme based on auctions effective since July 2016, separate auctions for seven defined RES categories and for capacity below 1 MW, wind onshore in residual category 7 ‘other RES sources’ Offshore > Support mechanism: feed-in premium system based on auctioned contract for difference > Remuneration: wholesale price plus premium to reach fixed support level determined by auction1 > Auctions: separate budget and process based on a centralised tender model, first auction accomplished in 2016 (max. bid 124 €/MWh, winning bid 72.7 €/MWh) > Support mechanism: only new feed-in premium based on auctioned contract for difference relevant > Remuneration: wholesale price plus premium to reach individual bid level > Auctions: new support scheme based on auctions effective since July 2016, separate auctions for seven defined RES categories and for capacity below 1 MW, wind offshore in category 3 ‘sources guaranteeing CO2 emission below 100 kg/MWh and production above 3504 MWh/MW/a’

1 Premium (SDE- contribution) calculated as the individual ‘base amount’ (auction outcome) minus conventional electricity price (‘correction amount’); however, premium is capped if the wholesale price falls below a defined floor price. The maximum support level per technology (‘cost price’) is determined per technology on an annual basis. 2 The cost price ranges for wind onshore refer to different site qualities (wind speed categories) with own categories for wind installations on dykes and in lakes.

slide-170
SLIDE 170

page 168 innogy · company presentation · 1 August 2016

Regulatory regimes and frameworks in innogy core markets

Appendix – Renewables

Italy Spain Onshore > Support mechanism: combination of feed-in tariffs (FiT) and tender schemes; tax regulation mechanisms for investment in RES-E plants; previous system based on green certificates > Remuneration: feed-in tariff based on register or determined in bidding process; bids based on a per cent reduction from base tariff1 of 127€/MWh with a floor at -30%; in previous system producers received market price + value of green certificate2 > Auctions: since 2013, individual feed-in determined in auctions for onshore assets >5MW capacity (pay-as-bid); plants <5MW are eligible for direct feed-in tariff though a specific register > Support mechanism: FiT and FiP until mid 2013. Pool price + fix investment compensation + opex compensation (not for wind and hydro) since mid 2013, aimed to achieve a ‘reasonable return’ based on the 10-year government bond plus a spread3 > Remuneration: sum of pool price and the yearly Investment Compensation (fix amount per MW installed) > Auctions: auctions used to provide support for new installations; first RES auction conducted in January 2016; no pre-qualification requirements apply4 Offshore > Support mechanism: combination of feed-in tariffs and tender schemes; tax regulation mechanisms for investment in RES-E plants; previous system based on green certificates > Remuneration: feed-in tariff determined in bidding process; bids based on a per cent reduction from base tariff1 of 165€/MWh; in previous system distributor received market price + value of green certificate2 > Auctions: Individual feed-in determined in auctions for any

  • ffshore plant due to high capacity

> Support mechanism: FiT and FiP until mid 2013. Pool price + fix investment compensation + opex compensation (not for wind and hydro) since mid 2013, aimed to achieve a ‘reasonable return’ based on the 10-year government bond plus a spread3 > Remuneration: sum of pool price and the yearly investment compensation (fix amount per MW installed) > Auctions: auctions used to provide support for new installations; first RES auction conducted in January 2016; no pre-qualification requirements apply4

1 Value 2013, constantly reduced since then. Base tariff at 110 €/MWh for auction 2016, with the floor set to -40%. 2 innogy assets in Italy started operation under the former green certificate scheme. They will now receive a feed-in tariff equal to the corresponding value of the former certificates for the residual period of the incentive. 3 Incentives are based on a standardised asset maintained by a well-managed company including investment costs, wholesale market income and operational costs during the regulatory lifetime. 4 Conditions may be different for future auctions.

slide-171
SLIDE 171

page 169 innogy · company presentation · 1 August 2016

Note: figures may not add up due to rounding differences. 1 As of 31 Dec 2015; excluding Zephyr portfolio.

Operational capacity overview Renewables segment1

Appendix – Renewables

Accounting view ( MW) Onshore Offshore Hydro Biomass Biogas Solar PV Total

Germany 567 295 375 5 1 1 1,244 United Kingdom 304 630 77

  • 1,011

Spain 447

  • 12
  • 459

Netherlands 197

  • 197

Poland 242

  • 242

Italy 67

  • 67

France

  • 44
  • 44

Portugal

  • 16
  • 16

Belgium

  • Total

1,823 925 525 5 1 1 3,280

Pro-rata view (MW) Onshore Offshore Hydro Biomass Biogas Solar PV Total

Germany 506 295 353 5 1 1 1,160 United Kingdom 239 585 77

  • 901

Spain 443

  • 10
  • 7

459 Netherlands 197

  • 197

Poland 226

  • 226

Italy 34

  • 34

France

  • 44
  • 44

Portugal 3

  • 16
  • 19

Belgium

  • 87
  • 87

Total 1,648 967 500 5 1 8 3,129

slide-172
SLIDE 172

page 170 innogy · company presentation · 1 August 2016

Onshore wind – KPIs

Appendix – Renewables

Pro-rata view 2013 2014 2015

Capacity (MW) Germany 461 491 506 United Kingdom 200 239 239 Spain 443 443 443 Netherlands 214 210 197 Poland 181 181 226 Italy 34 34 34 Portugal 3 3 3 Total capacity 1,537 1,601 1,648 Zephyr 33.3% share (UK) 110 110 110 Total incl Zephyr portfolio 1,647 1,712 1,758

Accounting view 2013 2014 2015

Capacity (MW) Germany 477 539 567 United Kingdom 265 304 304 Spain 447 447 447 Netherlands 214 210 197 Poland 197 197 242 Italy 67 67 67 Portugal – – – Total capacity2 1,667 1,763 1,823

Accounting view 2013 2014 2015

Load factor1 Germany 17% 17% 21% United Kingdom 27% 27% 30% Spain 29% 26% 25% Netherlands 25% 25% 27% Poland 26% 25% 26% Italy 22% 21% 19% Portugal – – – Average load factor 24% 23% 25% Production vol. (GWh) Germany 726 764 997 United Kingdom 536 669 806 Spain 1,125 1,023 997 Netherlands 462 456 478 Poland 396 429 499 Italy 129 122 111 Portugal – – – Total production volume 3,375 3,463 3,887

  • Avg. revenue3 (€/MWh)

Germany 95 98 95 United Kingdom 140 124 135 Spain 73 33 48 Netherlands 123 122 110 Poland 87 82 70 Italy 142 142 145 Portugal – – – Total avg. revenue 100 87 91

1 Load factor defined as production volume divided by maximum possible volume based on average of capacities at beginning and end of year. 2 Additionally, in 2013-15 innogy managed a PPA for the onshore assets of the UK Zephyr portfolio with a capacity of 196MW, for which innogy earned a management fee; ultimate counterparty of the PPA is the RWE

  • Group. Management fee for handling of PPA only included on OR/EBITDA level, not on revenue level.

3 Net revenues after deduction of transaction costs.

slide-173
SLIDE 173

page 171 innogy · company presentation · 1 August 2016

Offshore wind – KPIs

Appendix – Renewables

Pro rata view 2013 2014 2015

Capacity (MW) Germany – – 295 United Kingdom 297 466 585 Belgium 87 87 87 Total capacity 384 553 967 Zephyr 33.3% share (UK) 20 20 20 Total incl Zephyr portfolio 404 573 987

Accounting view 2013 2014 2015

Capacity (MW) Germany – – 295 United Kingdom 342 511 630 Belgium – – – Total capacity2 342 511 925

Accounting view 2013 2014 2015

Load factor1 Germany – – 48% United Kingdom 39% 39% 43% Belgium – – – Average load factor 39% 39% 44% Production vol. (GWh) Germany – – 625 United Kingdom 1,170 1,469 2,124 Belgium – – – Total production volume 1,170 1,469 2,749

  • Avg. revenue3 (€/MWh)

Germany – – 192 United Kingdom 163 160 183 Belgium – – – Total avg. revenue 163 160 185

1 Load factor defined as production volume divided by maximum possible volume based on average of capacities at beginning and end of year. 2 Additionally, in 2013-15 innogy managed a PPA for the offshore assets of the UK Zephyr portfolio with a capacity of 60MW, for which innogy earned a management fee; ultimate counterparty of the PPA is the RWE

  • Group. Management fee for handling of PPA only included on OR/EBITDA level, not on revenue level.

3 Net revenues after deduction of transaction costs.

slide-174
SLIDE 174

page 172 innogy · company presentation · 1 August 2016

Hydro power – KPIs

Appendix – Renewables

Pro-rata view 2013 2014 2015

Capacity (MW) Germany 355 353 353 United Kingdom 72 77 77 Spain 10 10 10 France 44 44 44 Portugal 16 16 16 Switzerland 23 23 Total capacity 521 523 500

Accounting view 2013 2014 2015

Capacity (MW) Germany 377 375 375 United Kingdom 72 77 77 Spain 12 12 12 France 44 44 44 Portugal 16 16 16 Switzerland Total capacity 522 525 525

Accounting view 2013 2014 2015

Load factor1 Germany 59% 52% 48% United Kingdom 21% 27% 31% Spain 29% 37% 21% France 30% 34% 32% Portugal 36% 40% 17% Average load factor 50% 46% 42% Production vol. (GWh) Germany 1,958 1,711 1,564 United Kingdom 131 176 209 Spain 30 39 22 France 119 133 125 Portugal 51 57 24 Total production volume 2,289 2,117 1,944

  • Avg. revenue2 (€/MWh)

Germany 53 61 56 United Kingdom 137 144 147 Spain 91 65 69 France 43 44 44 Portugal 95 95 91 Total avg. revenue 58 67 65

1 Load factor defined as production volume divided by maximum possible volume based on average of capacities at beginning and end of year. 2 Net revenues after deduction of transaction costs.

slide-175
SLIDE 175

page 173 innogy · company presentation · 1 August 2016

Asset Country Installed capacity (MW) innogy stake Capacity accounting view (MW) Capacity pro- rata view (MW) Year commissioned Support scheme end (year) Support type

Wind offshore

Rhyl Flats UK 90 50% 90 45 2010 2029 WS+certificate (1.5 ROC) Gwynt y Môr UK 576 50%

2

288 288 2015 2033 WS+certificate (2.0 ROC) Greater Gabbard UK 504 50%

2

252 252 2012 2032 WS+certificate (2.0 ROC) Thornton Bank 1-3 Belgium 325 27% 87 2009 - 2013 2029 - 2036 Wholesale+ certificate

3

Nordsee Ost Germany 295 100% 295 295 2015 2023 FiT/FiP/CfD (EEG 2014

4)

Total Wind Offshore 1,791 925 967

Wind onshore

Westereems Netherlands 156 100% 156 156 2009 2016 FiT/FiP/CfD Putlitz Germany 62 100% 62 62 2004 2024 FiT/FiP/CfD Luna + Tetis Spain 50 99% 50 49 2004 2024 WS+fixed premium

5

Juno + Hiperion Spain 50 99% 50 49 2004 2024 WS+fixed premium

5

Nowy Staw 1 Poland 45 100% 45 45 2014 2028 Wholesale+ Certificate Aldehuelas Spain 47 95% 47 45 2005 2025 WS+fixed premium

5

Suwalki Poland 41 100% 41 41 2009 2024 PPA Rio Gallego Spain 39 100% 39 39 2003 2023 WS+fixed premium

5

Operational capacity overview (1/6)1

Appendix – Renewables

Note: WS = Wholesale, FiT = Feed-in tariff, FiP = Feed-in premium, CfD = Contract for Difference. Figures may not add up due to rounding differences. 1 As of 31 December 2015; excluding Zephyr portfolio. 2 Consolidated with 50%. 3 Minimum price for offshore wind certificates are €107 per MWh for the first 216 MW of generating capacity, and €90 per MWh for capacity exceeding 216 MW. 4 EEG compression model: €194/MWh; €154/MWh; €39/MWh. 5 Fixed investment compensation.

slide-176
SLIDE 176

page 174 innogy · company presentation · 1 August 2016

Operational capacity overview (2/6)1

Appendix – Renewables

Asset Country Installed capacity (MW) innogy stake Capacity accounting view (MW) Capacity pro- rata view (MW) Year commissioned Support scheme end (year) Support type

Wind onshore (cont’d)

Novar 2 UK 37 100% 37 37 2013 2032 Wholesale+ certificate Little Cheyne Court UK 60 59% 60 35 2010 2027 Wholesale+ certificate Tychowo Poland 35 100% 35 35 2011 2025 Wholesale+ certificate Goole Fields 1 UK 33 100% 33 33 2014 2034 Wholesale+ certificate Bartelsdorf Germany 32 100% 32 32 2009 2029 FiT/FIP/CfD Taciewo Poland 30 100% 30 30 2012 2026 Wholesale+ certificate Urano Spain 30 99% 30 30 2004 2024 WS+fixed premium

2

Nowy Staw 1 Poland 28 100% 28 28 2015 2030 Wholesale+ certificate Middlemoor UK 54 51% 54 28 2013 2033 Wholesale+ certificate Los Labrados Spain 24 100% 24 24 2002 no limitation Wholesale Plana de la Balsa Spain 24 100% 24 24 2002 no limitation Wholesale Plana de Zaragoza Spain 24 100% 24 24 2002 no limitation Wholesale Plana Maria Spain 24 100% 24 24 2002 no limitation Wholesale Lanternoso Spain 24 100% 24 24 2005 2025 WS+fixed premium

2

Bosque Alto Spain 22 100% 22 22 2002 no limitation Wholesale

Note: WS = Wholesale, FiT = Feed-in tariff, FiP = Feed-in premium, CfD = Contract for Difference. Figures may not add up due to rounding differences. 1 As of 31 December 2015; excluding Zephyr portfolio. 2 Fixed investment compensation.

slide-177
SLIDE 177

page 175 innogy · company presentation · 1 August 2016

Operational capacity overview (3/6)1

Appendix – Renewables

Asset Country Installed capacity (MW) innogy stake Capacity accounting view (MW) Capacity pro- rata view (MW) Year commissioned Support scheme end (year) Support type

Wind onshore (cont’d)

Malterhausen Germany 22 100% 22 22 2002 2022 FiT/FIP/CfD Bancal Spain 21 100% 21 21 2007 2027 WS+fixed premium

2

Bradwell UK 21 100% 21 21 2014 2033 Wholesale+ certificate Bedburg-Königshovener Höhe A1 Germany 38 51% 38 19 2015 2034 FiT /FIP/CfD Siglos Spain 18 100% 18 18 2007 2027 WS+fixed premium

2

Acampo Armijo Spain 18 100% 18 18 2002 no limitation Wholesale Opalenica Poland 17 100% 17 17 2015 2030 Wholesale+ certificate Piecki Poland 32 51% 32 16 2011 2025 Wholesale+ certificate EE de Muel Spain 16 100% 16 16 1998 no limitation Wholesale Schmarloh Germany 16 100% 16 16 2008 2028 FiT/FIP/CfD Knabs Ridge UK 16 100% 16 16 2008 2027 Wholesale+ Certificate Bedburg-Königshovener Höhe A2 Germany 29 51% 29 15 2015 2035 FiT/FIP/CfD Lesse A Germany 14 100% 14 14 2003 2023 FiT/FIP/CfD Krzęcin Poland 14 100% 14 14 2013 2027 Wholesale+ certificate Kiln Pit Hill UK 14 100% 14 14 2013 2032 Wholesale+ certificate

Note: WS = Wholesale, FiT = Feed-in tariff, FiP = Feed-in premium, CfD = Contract for Difference. Figures may not add up due to rounding differences. 1 As of 31 December 2015; excluding Zephyr portfolio. 2 Fixed investment compensation.

slide-178
SLIDE 178

page 176 innogy · company presentation · 1 August 2016

Operational capacity overview (4/6)1

Appendix – Renewables

Asset Country Installed capacity (MW) innogy stake Capacity accounting view (MW) Capacity pro- rata view (MW) Year commissioned Support scheme end (year) Support type

Wind onshore (cont’d)

Grisel Spain 14 100% 14 14 2001 2021 WS+fixed Premium

2

Düshorner Heide Germany 26 51% 26 13 2014 2034 FiT/FIP/CfD Ururi Italy 26 51% 26 13 2011 2026 FiT/FIP/CfD3 San Basilio Italy 25 51% 25 13 2010 2025 FiT/FIP/CfD3 Westereems Netherlands 12 100% 12 12 2012 2027 FiT/FIP/CfD Barbecke Germany 11 100% 11 11 2002 2022 FiT/FIP/CfD Lasbek Germany 11 100% 11 11 2004 2024 FiT/FIP/CfD Titz-Nord Germany 21 51% 21 11 2015 2022 FiT/FIP/CfD Lesse B Germany 10 100% 10 10 2010 2030 FiT/FIP/CfD Aggregated sites GER <10MW4 Germany 281 Site specific 275 271 Site specific Site specific Site specific5 Aggregated sites UK <10MW4 UK 71 Site specific 71 57 Site specific Site specific Site specific5 Aggregated sites NL <10MW4 Netherlands 29 Site specific 29 29 Site specific Site specific Site specific5 Aggregated sites IT <10MW4 Italy 16 Site specific 16 8 Site specific Site specific Site specific5 Aggregated sites ES <10MW4 Spain 3 Site specific 3 3 Site specific Site specific Site specific5 Aggregated sites PT <10MW4 Portugal 8 Site specific 3 Site specific Site specific Site specific5 Total wind onshore 1,838 1,823 1,648

Note: WS = Wholesale, FiT = Feed-in tariff, FiP = Feed-in premium, CfD = Contract for Difference. Figures may not add up due to rounding differences. 1 As of 31 December 2015; excluding Zephyr portfolio. 2 Fixed investment compensation. 3 Formerly wholesale + certificate. 4 Based on pro rata capacity. 5 Support type Wholesale + Certificate or FiT/FIP/CfD or Wholesale + fixed premium depending on asset.

slide-179
SLIDE 179

page 177 innogy · company presentation · 1 August 2016

Operational capacity overview (5/6)1

Appendix – Renewables

Note: WS = Wholesale, FiT = Feed-in tariff, FiP = Feed-in premium, CfD = Contract for Difference. Figures may not add up due to rounding differences. 1 As of 31 December 2015; excluding Zephyr portfolio. 2 Guarantee of Origin. 3 78% of the output is marketed by innogy; 46% fall under German EEG (FiT)

Asset Country Installed capacity (MW) innogy stake Capacity accounting view (MW) Capacity pro- rata view (MW) Year commissioned Support scheme end (year) Support type

Hydro

RADAG Germany 77 78% 77 60 1933 no limitation Wholesale+ GoO2 Detzem Germany 24 100% 24 24 1962 no limitation Wholesale+ GoO2 Lehmen Germany 20 100% 20 20 1962 no limitation Wholesale+ GoO2 Wintrich Germany 20 100% 20 20 1965 no limitation Wholesale+ GoO2 Trier Germany 19 100% 19 19 1961 no limitation Wholesale+ GoO2 RADAG WKW Germany 24 78% 24 18 2009 2030 Wholesale; feed-in3 Enkirch Germany 18 100% 18 18 1966 no limitation Wholesale+ GoO2 Dolgarrog HH UK 17 100% 17 17 1907 2027 Wholesale+ certificate Fankel Germany 16 100% 16 16 1963 no limitation Wholesale+ GoO2 Müden Germany 16 100% 16 16 1965 no limitation Wholesale+ GoO2 Neef Germany 16 100% 16 16 1966 no limitation Wholesale+ GoO2 Heimbach Germany 16 100% 16 16 1905 no limitation Wholesale+ GoO2 Koblenz Germany 16 100% 16 16 1951 no limitation Wholesale+ GoO2 Dolgarrog LH UK 15 100% 15 15 1907 2027 Wholesale+ certificate Schwammenauel Germany 14 100% 14 14 1938 no limitation Wholesale+ GoO2

slide-180
SLIDE 180

page 178 innogy · company presentation · 1 August 2016

Operational capacity overview (6/6)1

Appendix – Renewables

Note: WS = Wholesale, FiT = Feed-in tariff, FiP = Feed-in premium, CfD = Contract for Difference. Figures may not add up due to rounding differences. 1 As of 31 December 2015; excluding Zephyr portfolio. 2 Guarantee of Origin. 3 Based on pro rata capacities. 4 Support type Wholesale + Certificate or FiT/FIP/CfD or Wholesale + fixed premium depending on asset.

Asset Country Installed capacity (MW) innogy stake Capacity accounting view (MW) Capacity pro rata view (MW) Year commissioned Support scheme end (year) Support type

Hydro

Zeltingen Germany 14 100% 14 14 1964 no limitation Wholesale+ GoO2 Serrig Germany 12 100% 12 12 1985 no limitation Wholesale+ GoO2 Aggregated sites GER <10MW3 Germany 53 100% 53 53 Site specific Site specific Site specific4 Aggregated sites UK <10MW3 UK 45 100% 45 45 Site specific Site specific Site specific4 Aggregated sites ES <10MW3 Spain 12 Site specific 12 10 Site specific Site specific Site specific4 Aggregated sites FR <10MW3 France 44 Site specific 44 44 Site specific Site specific Site specific4 Aggregated sites PT <10MW3 Portugal 24 Site specific 16 16 Site specific Site specific Site specific4 Hydro 533 525 500

Biomass and biogas

Biomass site Germany 5 100% 5 5 2009 2029 FiT/FiP/CfD Biogas site Germany 1 100% 1 1 2007 2029 FiT/FiP/CfD Biomass and biogas 6 6 6

Solar and PV

Andasol 3 Spain 50 12.8% 6 2012 2036 WS+Fixed and Ops premium Aggregated sites <1MW GER/ES 2 Site specific 1 1 Site specific Site specific FiT/FiP/CfD Solar and PV 52 1 8