Transforming RWE and securing a sound financial base (as of May 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 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"), or 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 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 or 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. 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 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. 2 2
Three steps to securing a sound financial base NewCo Efficiencies Dividend > Listing of a unique and > Step up of efficiency > Dividend policy reflects the leading European utility programme by another general business situation comprising grid, retail and €500 million and market conditions renewables businesses > Additional measures > Fiscal 2015: suspension of > ~10% capital increase at largely stemming from payment for common NewCo envisaged to fund conventional power shares and €0.13 per preferred share future growth investments generation 3
Formation of a unique and leading European utility > RWE to establish a new leading European utility comprising the grid, retail and renewables businesses > Conventional power generation and trading businesses retained as separate functional units RWE AG NewCo with RWE AG shareholders shareholders > Key milestones: 100% – December 2015: Supervisory Board approval RWE AG – March 2016: Nomination of management team ~10% Conventional Supply & – 1 April 2016: Operational start power Trading generation – 30 June 2016: Full implementation of new structure planned ~90% – Listing of ~10% of NewCo via primary offering envisaged for late 2016 > IPO proceeds mainly to be used to finance growth NewCo investments in NewCo Grid Retail Renewables > Placing of further stakes of NewCo by RWE AG via secondary offer possible at the same or later point in time > RWE AG plans to remain majority shareholder in NewCo 4
Designated management team for NewCo with long- standing experience and extensive industry knowledge Peter Terium Bernhard Günther Uwe Tigges > Chief Executive Officer > Chief Financial Officer > Chief HR Officer > 13 years sector experience > 18 years sector experience > 32 years sector experience Hildegard Müller Martin Herrmann Hans Bünting > COO – Grid > COO – Retail > COO – Renewables > 7 years sector experience > 14 years sector experience > 20 years sector experience 5
NewCo: Strong downstream business with attractive renewables footprint Grid Supply Renewables > RWE operates 550,000 km of > Strong retail organisation with > Renewables portfolio of more grid assets in five European 23m customers in 12 European than 3.5 GW capacity mainly in markets (GER, PL, CZ, HU, SK) markets six European markets (GER, UK, SPA, NL, PL, ITA) > Leading positions in core > RWE is No. 3 in terms of markets (e.g., largest electricity electricity sales and No. 4 in > RWE belongs to the top 5 in DSO in GER 1 , largest gas DSO terms of gas sales in Europe offshore wind globally with in CZ 1 ) ~1 GW of capacity > Well positioned in various B2C > Excellent distribution grid markets in terms of profitability, > Focus on operational excellence management for electricity customer growth and and value-adding growth across and gas supply satisfaction (e.g., GER, NL) entire fleet > Operating result of ~€2.0bn > Operating result of ~€0.8bn > Operating profit of ~€0.5bn (2015 Division Grids/Participa- (2015) (2015) tions/Other) 1 Measured by transported volumes in Germany and by grid length in CZ. Assumption: NewCo based on current RWE AG divisions Renewables, Grids/Participations/Others and Supply. 6
NewCo: Unique opportunity to invest in one of the leading European utilities of tomorrow’s energy world Unique new utility stock Attractive financial profile > Unique new utility stock with exposure mainly > Strong and stable cash flow generation to stable European markets > Currently ~65% EBITDA derived from > A leading distribution grid company in Europe regulated activities > Amongst top 5 retailers by sales in 8 markets > Strong balance sheet with prominent smart product offerings > Profitable organic growth potential > Attractive renewables platform with >3.5 GW capacity installed > Commitment to shareholder returns and attractive dividend > Strong on- and offshore wind project pipeline Assumption: NewCo based on current RWE AG divisions Renewables, Grids/Participations/Others and Supply. 7
RWE AG: Focused business portfolio with clear management mandate Conventional Power Generation Supply & Trading > Highly efficient and modernised power > Commercial asset optimisation of plant portfolio generation fleet – full exploitation of optionality > Reduction of lignite generation in line with national CO 2 targets > Expansion of trading and origination business into new markets and > Secure financially manageable phase-out commodities of nuclear > Growth of Principal Investment activities > Extraction of option value from spread assets > Commodity solutions for industrial customers > Maintain positive free cash flow > Management of long term gas supply, > Benefit from potential wholesale price storage and transport contracts recovery or new market design 8
Persistent pressure on conventional power generation met by continued efficiency efforts €/MWh € million €60 1200 60 €51 €48 50 €41 800 40 30 400 20 10 0 0 2012 2013 2014 2015 German 1 year base load forward (lhs) RWE average realised power price (lhs) Net benefit to operating result from efficiency measures at GenCo (rhs) > Accumulated cost savings and efficiency improvements of approximately €1 billion realised between 2012 and 2015 > In total decisions taken for approx. 9 GW capacity measures: 3.7 GW of capacity (partially) mothballed; 2.5 GW of capacity shut or to be shut / 3 GW of contracts cancelled > Headcount reduction of 3,600 FTEs since 2012 9
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