Investor Conference Call FY 2017 22 March 2018 » Thomas Kusterer, Chief Financial Officer Ingo Peter Voigt, Head of Finance, M&A and Investor Relations
Earnings turnaround achieved in 2017 Adjusted EBITDA in € bn turnaround 2,500 2.40 ≥ 2.40 0% to +5%* 2.23 0% to +5% 2.17 2.11 2.11 1.94 2,000 Investor Conference Call 22 March 2018 2012 2013 2014 2015 2016 2017 2018 2019 2020 › Operating performance * Referred to forecast 2018 › Efficiency measures › Financial discipline 2
Sales Operating increase above expectations Adjusted EBITDA Sales volume Electricity Gas in € m in TWh in TWh 43.2 57.0 330 52.3 38.8 B2C 14.4 B2C 250 15.0 10.8 15.0 +32 % -10 % +9 % B2B 42.6 41.5 B2B 28.2 23.7 2016 2017 2016 2017 2016 2017 Investor Conference Call 22 March 2018 + Positive effects from exiting the unprofitable EnBW and Watt B2B commodity business in 2016 + Reduced ramp-up costs for billing service for other sales and grid operators 3
Grids Increase as expected Adjusted EBITDA Transmission volume Electricity Gas in € m in TWh in TWh 1,046 64.5 64.4 33.0 33.1 1,004 0 % +4 % 0 % 2016 2017 2016 2017 2016 2017 Investor Conference Call 22 March 2018 + Positive effects due to first-time consolidation of VNG - Lower earnings from use of distribution grids 4
Renewable Energies Increase mainly driven by higher wind yields Adjusted EBITDA Generation volume Renewables generation mix in € m in TWh 1 in TWh Onshore 7.1 Other 332 6.9 8% 295 15% Offshore 17% +12 % +3 % 2016 2017 2016 2017 Investor Conference Call 22 March 2018 60% Run-of-river + Higher wind yields compared to previous year, notably at offshore wind farms + Further onshore wind farms commissioned (+204 MW) - Reduced water levels at our run-of-river power plants - Electricity from run-of-river power plants sold on forward market at lower wholesale market prices 1 Includes long-term procurement agreements and generation from partly owned power stations; the figures indicated are taken from the segments; segment excludes generation from pump storage 5 plants that is associated in the generation and trading segment. Divergence from 100 percent possible due to rounding effects.
Generation and Trading Earnings increase mainly due to consolidation effects Adjusted EBITDA Generation volume Conventional generation mix in € m in TWh 1 in TWh Other 45.6 377 42.7 337 13% Lignite 14% +12 % -6 % Nuclear 42% 2016 2017 2016 2017 Investor Conference Call 22 March 2018 31% Hard coal + Positive effects due to first-time consolidation of VNG + Positive effects from elimination of nuclear fuel tax - Shutdown of KKP 2 nuclear power plant - Delivered electricity sold on forward market at lower wholesale market prices 1 Includes long-term procurement agreements and generation from partly owned power stations; the figures indicated are taken from the segments. Segment includes pump storage plants. 6 Divergence from 100 percent possible due to rounding effects.
FFO: Significant increase Mainly driven by the nuclear fuel tax refund EBITDA FFO Retained CF II 1 in € m in € m in € m 3,752 3,135 Provisions -472 Taxes +81 Non-cash items -386 Investor Conference Call 22 March 2018 1,530 Net interest/ 950 +166 dividends received 731 Contribution to dedica- -6 ted financial assets 2017 2017 2016 2016 2017 7 1 Retained CF corrected for effects of the nuclear fuel tax refund
Decrease in net debt mainly due to nuclear fuel tax refund In € m -16 % 10,046 8,460 -436 500 -3,216 1,301 264 Investor Conference Call 22 March 2018 2 2 2 Net debt FFO Working capital Investments, 50% refund Others Net debt 1 31.12.2016 acquisitions and hybrid bond 31.12.2017 divestments 1 The figure for the previous year has been restated 2 Netted of for KFK effects 8
Asset Liability Management Model EnBW nuclear and pension provisions still covered EnBW’s CF-based model in € m 100% Coverage Asset contribution 16.000 projected 2030 16,000 OCF contribution Provisions 12.000 12,000 8.000 Financial assets 8,000 4.000 4,000 2040 NO 800 impact on Investor Conference Call 22 March 2018 OCF 600 Max. € 300 m 1 400 impact on 200 OCF 0 2017 2023 2029 2035 2041 1 Adjusted for inflation 9
Relevance of strategic performance drivers remains Operating performance Accelerated ramp up of Financial strength improved increased in all segments efficiency measures 1.40 1.30 112 % 1.05 0.55 72 % 0.30 2.1 1.9 Investor Conference Call 22 March 2018 +55% 0.75 0.75 +9% 2016 2017 2016 2017 2019 2016 2017 Adjusted EBITA in € bn Internal financing capability additional in € bn Retained Cash Flow minus FOKUS Net investments >0 10
Strong group profit and EPS driven by operating performance and nuclear fuel tax refund Group net profit/loss 1 Earnings per share 1 -1.8 bn € -6.64€ Dividend 2016 2016 2.1 bn € 7.58€ 2017 2017 proposal 2017 in €/share Investor Conference Call 22 March 2018 Net debt of the EnBW Group Equity ratio 0.50 10.0 bn € 8.3 % 2016 2016 8.5 bn € 15.1 % 2017 2017 1 Profit/loss attributable to shareholders of EnBW AG 11
Outlook 12
Outlook operating performance 2018 Renewable Generation and Group Sales Grids Energies Trading Adj. EBITDA 2,113 330 1,046 332 377 2017 in € m Investor Conference Call 22 March 2018 0 to Forecast +5 to +10 to -5 to 0 to 2018 +15 +5 +20 -15 -10 in % 13
Portfolio transition shows substantial progress, in line with EnBW’s 2020 strategy Adjusted EBITDA 1 Share of in € bn low-risk earnings 10% 15% 15-20% 15-20% 30% 2012 2018 2020 2 15% 33% 48% 10- 2.4 2.4 2.1 – 2.2 15% Investor Conference Call 22 March 2018 50-55% 10% 40% Realistic earnings target 2020 › Expansion of onshore wind from 540 MW to 1,000 MW › In 2019 commissioning of 609 MW offshore wind farms Hohe See and Albatros › Continuous investments in distribution and Renewable Energies Grids Sales Generation &Trading transmission grids 1 Divergence from 100% possible due to rounding effects › Efficiency measures of € 1.4 bn will be achieved in 2 Forecast 2019 already 14
Wind offshore: EnBW goes international Formosa 3 – three project sites with a total capacity of Taipei Formosa 3 City approx. 2,000 MW, acquisition of 37.5% stake project sites (approx. 2 GW) Joint venture contains the strengths of EnBW, Macquarie Capital and Swancor Fixed 20-year PPA with a feed-in tariff higher than European benchmarks Investor Conference Call 22 March 2018 Favourable sites with good wind energy potential and lower water depth Next steps: EU merger control clearance, secure grid capacity, start tendering process Potential offshore wind farms Taiwan 15
We have defined specific growth targets beyond 2020, with a clear set of priorities 1 Sustainable power infrastructure Development of earnings > 3.0 Adjusted EBITDA in € bn › Expansion of onshore and offshore wind to > 3,500 MW by 2025 › Selective international business activities › CO 2 -reduced generation (e.g. midstream gas, fuel switch) 2.4 Generation & Trading 2 System-critical infrastructure Renewable Energies › Expansion of the distribution and electricity transmission grid › Growth of network-related services Investor Conference Call 22 March 2018 Grids › New areas of system-critical infrastructure (e.g. public security) 3 Intelligent infrastructure for the customer › Cost reduction and digitization of B2C sales as well as Sales transformation to customer infrastructure business › New infrastructure-related business areas beyond energy (e.g. mobility infrastructure) 2025 2020 16
Questions & Answers 17
Appendix › Additional information Page 19 › Service information Page 27 Investor Conference Call 22 March 2018 18
Non-operating result 2017 2016 Variance in % In € m Income/expenses relating to nuclear power 1,278.2 -860.6 - Income from the release of other provisions 25.7 18.9 36.0 Result from disposals 317.8 28.4 - Release of/Addition to the provisions for onerous contracts relating to electricity 59.2 -198.1 - procurement agreements Income from reversals of impairment losses 93.1 5.9 - Restructuring -70.0 -110.4 36.6 Other non-operating result -64.6 -92.3 30.0 Investor Conference Call 22 March 2018 Non-operating EBITDA 1,639.4 -1,208.2 - Impairment losses -134.2 -1,479.2 - Non-operating EBIT 1,505.2 -2,687.4 - 19
Calculation of net debt In € m -6,233 8,460 11,774 7,150 -996 Investor Conference Call 22 March 2018 -3,236 2,918 Financial debt 50% equity credit Oerating cash & Net financial Pension and Dedicated Net debt and others cash equvalents Liabilities nuclear power financial assets provisions (net) 20
Working capital effects In € m 4,671 95 4,407 27 58 84 Investor Conference Call 22 March 2018 KFK-Payment 1 Trade Derivatives Inventories Others Change in WC receivables/payables 1 Less a contractual partner's share of nuclear decomissioning obligations assumed in connection with electricity deliveries 21
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