H1 2019 Results presentation Investor and Analyst Conference Call 14 August 2019 Markus Krebber, Chief Financial Officer Gunhild Grieve, Head of Investor Relations
Disclaimer This document contains forward-looking statements. These statements are based on the current views, expectations, assumptions and information of the management, and are based on information currently available to the management. Forward-looking statements shall not be construed as a promise for the materialisation of future results and developments and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those described in such statements due to, among other things, changes in the general economic and competitive environment, risks associated with capital markets, currency exchange rate fluctuations, changes in international and national laws and regulations, in particular with respect to tax laws and regulations, affecting the Company, and other factors. Neither the Company nor any of its affiliates assumes any obligations to update any forward-looking statements. All figures regarding the renewables business are based on pro forma combined innogy and E.ON publicly available data. The implementation of the transaction is still subject to conditions, including merger control clearances. RWE AG | H1 2019 Conference Call | 14 August 2019 RWE AG | H1 2019 Conference Call | 14 August 2019 Page 2
RWE raised outlook for FY19 after strong earnings in H1 > Very good H1 for RWE on the back of an outstanding trading performance > Outlook for RWE increased; dividend target of € 0.8 per share for FY 2019 confirmed > Conversion of preferred shares to common shares completed, preferred stock delisted; #OneShareOneVote > Closing of the innogy transaction between RWE and E.ON expected for September 2019 > Aberthaw hard coal power station to be closed end of March 2020 > Discussions with German Government on coal phase-out ongoing RWE AG | H1 2019 Conference Call | 14 August 2019 RWE AG | H1 2019 Conference Call | 14 August 2019 Page 3
Strong adjusted EBITDA of € 1,372 million driven by extraordinary earnings from Supply & Trading Group RWE stand-alone ( € million) 1,140 825 H1 2018 Lignite & Nuclear: Earnings at previous year’s level > as a result of higher realised margins despite lower +5 Lignite & Nuclear +5 generation volumes > European Power: Weak earnings due to lower -97 European Power -97 production volumes, lower earnings from commercial optimisation and absence of UK capacity payments +333 Supply & Trading +333 > Supply & Trading: Extraordinary earnings on the back +93 1 innogy +17 of outstanding trading performance and strong gas & LNG business -29 Other, consolidation -26 > innogy as part of RWE stand-alone: dividend of € 700 million 2 in Q2 2019 1,372 1,130 H1 2019 1 innogy - continuing operations. | 2 innogy dividend as contractually agreed with E.ON. RWE AG | H1 2019 Conference Call | 14 August 2019 RWE AG | H1 2019 Conference Call | 14 August 2019 Page 4
Lignite & Nuclear – earnings at comparable level to H1 2018 in spite of the effect from Hambach restriction Key financials H1 2019 versus H1 2018: Slightly higher realised generation margins € million H1 2019 H1 2018 change Lower production volumes, among others due to restrictions at Hambach mine and outages Adj. EBITDA 172 167 +5 t/o non-recurring items 1 - - - Depreciation -162 -134 -28 Outlook for FY 2019 adjusted EBITDA: between € 300 and € 400 million Adj. EBIT 10 33 -23 Slightly higher realised generation margins (hedged outright price: ~ € 29/MWh vs. ~ € 28/MWh in 2018) t/o non-recurring items 1 - - - Impact from production restrictions at Hambach lignite mine Capex -116 -102 -14 (~ - € 100 million) Cash contribution 2 56 65 -9 Outlook does not include any impact from measures proposed by the German ‘Growth, Structural Change and Employment’ commission 1 Non-recurring items not included in non-operating result. 2 Cash contribution = adj. EBITDA minus capex with effect on cash; before changes in provisions; excl. investments from assets held for sale. RWE AG | H1 2019 Conference Call | 14 August 2019 RWE AG | H1 2019 Conference Call | 14 August 2019 Page 5
European Power – full year guidance expected to end at the bottom of the range due to weak Q1 Key financials H1 2019 versus H1 2018: Lower production volumes € million H1 2019 H1 2018 change Less earnings from commercial optimisation UK 62 99 -37 Absence of capacity payments due to suspension of UK Continental Europe 36 95 -59 capacity market (- € 33 million y-o-y) 4 Adj. EBITDA 1 99 196 -97 t/o non-recurring items 2 - - - Outlook for FY 2019 adjusted EBITDA: at the bottom of the range of € 250 to € 350 million Depreciation -154 -147 -7 No income from UK capacity market assumed as long as legal Adj. EBIT -55 49 -104 situation is unclear 4 Less earnings from commercial optimisation t/o non-recurring items 2 - - - Capex -85 -67 -18 Cash contribution 3 14 129 -115 1 Total adj. EBITDA includes further income from other subsidiaries. | 2 Non-recurring items not included in non-operating result. | 3 Cash contribution = adj. EBITDA minus capex with effect on cash; before changes in provisions. | 4 Under the UK capacity market regime RWE had secured capacity payments of c. € 100 million for fiscal year 2018 and c. € 180 million for fiscal year 2019. The payments have been suspended after the decision of the General Court of the European Court of Justice from November 2018. For 2018, RWE has received capacity payments of c. € 50 million for Q1-Q3 2018. The figures still include the Aberthaw plant for which we have two transfer agreements in place starting 1 Oct 2019. RWE AG | H1 2019 Conference Call | 14 August 2019 RWE AG | H1 2019 Conference Call | 14 August 2019 Page 6
Slight improvement of hedged spread levels in 2020 - 2022 Expected positions and hedge status as of 30 June 2019 (including Hambach restrictions) Before any measures resulting from proposals of ‘Growth, Structural Change and Employment’ commission Average hedge price 2019 – 2022 corresponds with average hedged CO 2 price ( € /MWh) of: Outright ~5 ~5 ~10 ~16 (Lignite & ~47 ~29 ~32 ~41 Nuclear) ~ 75 TWh ~ 65 TWh ~ 65 TWh ~ 65 TWh >90% >90% >90% >60% 2022E 2019 2020E 2021E Change to reported average Average hedge price ( € /MWh) Open position Fully hedged position Implicit fuel hedge hedge price as of 31 Mar 2019 50 – 70 TWh 1 50 – 70 TWh 1 50 – 70 TWh 1 Spread 50 – 70 TWh 1 (Euro- >90% >90% pean >20% >70% <10% Power) 2019 2020E 2021E 2022E Open position Hedged position (%) > CO 2 position financially hedged until mid-2020s CO 2 1 Total in-the-money volumes. RWE AG | H1 2019 Conference Call | 14 August 2019 RWE AG | H1 2019 Conference Call | 14 August 2019 Page 7
Improvement of fuel spreads for Cal 2020 to 2022 Development of German fuel spreads 1 8,00 6,00 4,00 € /MWh 2,00 0,00 -2,00 -4,00 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Months to delivery Cal18 Cal19 Cal20 Cal21 Cal22 1 Fuel spread defined as: Power price – (pass-through-factor carbon × EUA price + pass-through-factor coal × coal price + pass-through-factor gas × gas price). Note: Data based on fuel spreads per end of month ( € /MWh). Source: Bloomberg; data until 30 June 2019. RWE AG | H1 2019 Conference Call | 14 August 2019 RWE AG | H1 2019 Conference Call | 14 August 2019 Page 8
Supply & Trading – after outstanding performance in H1, FY19 outlook increased: significantly above € 300 million Key financials H1 2019 versus H1 2018: Outstanding trading performance € million H1 2019 H1 2018 change Gas & LNG above previous year’s result Absence of value adjustment within Principal Investment Adj. EBITDA 434 101 +333 portfolio in Q2 2018 t/o non-recurring items 1 - - - Depreciation -5 -2 -3 Outlook for FY 2019 adjusted EBITDA: Significantly above € 300 million (previously € 100 - € 300 million) Adj. EBIT 429 99 +330 Outstanding trading performance t/o non-recurring items 1 - - - Strong Gas & LNG business Capex -4 -4 - Absence of value adjustment within Principal Investment portfolio in Q2 2018 Cash contribution 2 430 97 +333 > Long-term average earnings contribution of approx. € 200 million expected 1 Non-recurring items not included in non-operating result. 2 Cash contribution = adj. EBITDA minus capex with effect on cash; before changes in provisions. RWE AG | H1 2019 Conference Call | 14 August 2019 RWE AG | H1 2019 Conference Call | 14 August 2019 Page 9
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