enbw energie baden-württemberg ag · 2020-06-03 · enbw energie baden-württemberg ag...

Energie braucht Impulse

EnBW Energie Baden-Württemberg AG

Presentation byDr. Christian HolzherrChief Financial OfficerandIngo Peter Voigt Senior Vice President and Head of Finance/IR

Adding Values With Energy

Dresdner Kleinwort German Investment SeminarJanuary 16, 2008

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Disclaimer

› No offer or investment recommendation

This presentation/report has been prepared for information purposes only. It does not constitute an offer, an invitation or a recommendation to purchase or sell securities issued by EnBW Energie Baden-Württemberg AG (“EnBW”), a company of the EnBW Group or any other company. This presentation/report does not constitute a request, instruction or recommendation to vote or give consent. All descriptions, examples and calculations are included in this presentation/report for illustration purposes only.

› Future-oriented statements

This presentation/report contains future-oriented statements that are based on current assumptions, plans, estimates and forecasts of the management of EnBW. Such future-oriented statements are therefore only valid at the time of initial publication. Future-oriented statements are indicated by the context, but may also be identified by the use of the words “may”, “will”, “should”, “plans”, “intends”, “expects”, “believes”, “assumes”, “forecasts”, “potentially” or “continued” and similar expressions.

By nature, future-oriented statements are subject to risks and uncertainties that cannot be controlled or accurately predicted by EnBW. Actual events, future results, the financial position, development or performance of EnBW and the companies of the EnBW Group may therefore diverge considerably from the future-oriented statements made in this presentation/report. Therefore it cannot be guaranteed nor can any liability be assumed otherwise that these future-oriented statements will prove complete, correct or precise or that expected and forecast results will actually occur in the future.

› No obligation to update the information

EnBW assumes no obligation of any kind to update the information contained in this presentation/report or to adjust or update future-oriented statements to future events or developments.

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Content

› Who We Are

› What Happened in 2007

› German Utilities Environment

› Strategy

› Performance

› Outlook

› Investor Calendar 2008

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Significant market shares along the whole value chain:

› About 15 GW power generation 100 GW

in Germany*

› About 15% of the German transport and distribution grid based on

revenues

› More than 5 mn customers 40 mn

in Germany*

› Competition oriented business model with a structurally

unbundled production

› Strong position in gas, among the top ten distributors figures

as of 2006

EnBW is the “Number 3” in Germany which is Europe’s largest Utility Market

* Figures approx., Source VDEW 2006

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EnBW is well positioned to deal with the future market challenges in a more integrated European Utility Market

› EnBW has sufficient financial flexibility to pursue significant

investments in its core business

› EnBW’s CO2 emissions are well below the industry average in

Germany

› EnBW’s power plants are among the youngest

› EnBW has a significant marketing and sales power

› EnBW takes an active role in the implementation of a well

balanced regulatory system and will continue to promote

competition in the energy market

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Content

› Who We Are



› Strategy

› Performance

› Outlook


EnBW is well equipped to deal with the current and future challenges of

the energy market.

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› On October 1, 2007, Hans-Peter Villis (49) succeeded Prof. Dr. Claassen as

Chief Executive Officer.

After having held several Top Management positions at Gelsenwasser AG and E.ON

Westfalen Weser AG, his previous position was deputy CEO and CFO at E.ON Nordic in

Sweden.

› Pierre Lederer, Chief Operating Officer was appointed deputy chairman of EnBW,

effective October 1, 2007.

› Dr. Bernhard Beck was reappointed as Chief Human Resources and Information Officer,

effective October 1, 2007.

› Dr. Christian Holzherr was reappointed as Chief Financial Officer,

effective January 1, 2008.

› On October 1, 2007, Dr. Hans-Josef Zimmer was appointed as Chief Technical Officer.

Prior to that he was chairman of the management board of Energie Baden-Württemberg

Kernkraft GmbH and member of the board of EnBW Kraftwerke AG.

New Board of Management will increase efforts for operational excellence and strategic growth in the core business

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› After the Operational Safety Review Team (OSART) mission* in EnBW’s Philippsburg

nuclear power plant in 2006, EnBW has claimed for a similar assessment of its

Neckarwestheim nuclear power plant by the International Atomic Energy Agency (IAEA)

› The IAEA has stated that many of the recommendations and suggestions from the

Philippsburg’s assessment have already been implemented by the Neckarwestheim

nuclear power plant

› With the mission in Neckarwestheim, EnBW is the only operator of nuclear power plants

in Germany whose entire production sites have been completely assessed by the IAEA

within a few years**

› EnBW is expecting a positive decision of the German Ministry of the Environment

concerning its application for the transfer of residual electricity volumes from

Neckarwestheim II to Neckarwestheim I

* The OSART mission is the world’s most demanding inspection for nuclear assets

** Results should be published in the next few months

EnBW is confident in its nuclear operations as a successfully audited nuclear operator

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Strategic partnership in the Rotterdam-based LionGas LNG terminal project:

› The agreement, signed June 4, 2007, provides EnBW with capacity rights to 3 bn cubic

meters of natural gas per year from the LionGas terminal as well as a 15 percent equity

stake in the facility

› Thus, EnBW will substantially strengthen its position in the gas market, with flexibility

in the midstream gas market which in turn creates the basis for further growth

› The partnership between EnBW and 4Gas

› is in line with EnBW´s strategy to deepen the supply chain/to increase capacity

› will help to secure the supply of natural gas to northwest Europe

› will strengthen the position of the Port of Rotterdam as a major European energy

port

› will strengthen the position of the Netherlands as a central gas trading hub

› The commissioning of LionGas is expected to be operational in 2010/2011

EnBW strengthened its midstream gas position in signing a MoU with 4Gas*

*4Gas is an independent company dedicated to developing and operating LNG import terminals. 4Gas is the world’s only independent LNG -

terminaling company with a global reach. The LionGas project of 4Gas in Rotterdam is the only LNG import terminal project in the Netherlands

for which all required approvals have been given.

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LionGas Regasification Project in Rotterdam

4Gas (independent Project developer)

Rotterdam (Netherlands)

2011 – 2012

9 bn cbm / year (option for expansion up to 18 bn cbm / year)

Profile of the LionGas Terminal › Project developer:

› Terminal site:

› Commissioning date:

› Total regas. capacity:

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› On September 3, 2007, the electricity brand Yello was

launched in the Swedish power market.

› The launch started successfully with the first customers

already in delivery.

› The extensive deregulation of the Swedish power market (churn-rate of

approx. 40%) offers the potential for successful growth outside of Germany.

› While tapping additional regions Yello also expands its growth potential in the

German power sector.

› Being, once again, a frontrunner in the market liberalization and in order to

meet the customer demand to control and measure their consumption

efficiently, Yello introduced an intelligent electric meter.

EnBW widened its downstream activities by going international with Yello Strom and pursuing additional growth in Germany

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Pilot Schemes: Yello Gas and Smart Meter „Sparzähleronline“

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Content

› Who We Are



› Strategy

› Performance

› Outlook


EnBW takes an active role in the implementation of a well balanced

regulatory system and will continue to promote competition in the energy

market.

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› Nuclear phase-out and goals for CO² emissions reduction set a big challenge

for German energy policy

› Substantial investments in new generation capacity - mainly coal

and gas fired plants - are needed to meet future demand

› Market rules and market structure are under discussion:

› Tightening of German antitrust law (GWB29): Additional threats for the

competitive elements of the value chain

› Drafts of the 3rd European Union liberalisation package: Additional threats

for the competitive positioning of German utilities

EnBW’s position :

› Regulation should focus on monopolies, not on market activities

› Support for the establishment of a unified market for European players

In a European context Germany as the largest utility market faces the most demanding challenges

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The setup of the regulatory system encounters challenges to maintain the level of reliability

› Since market liberalisation in 1998: Freely negotiated third party access

agreements (“Verbändevereinbarungen”)

› Since 2006 : Federal grid agency (“Bundesnetzagentur”) for regulation of grids

› Transport and distribution grids

› Cost based tariffs for 2007/2008 each; the approved costs for 2008 will be

the basis for the incentive based regulation

› Incentive based regulation from 2009 onwards for two regulatory periods of

5 years each; first gas regulatory period lasts for four years only

EnBW’s position :

› Generally supports/promotes the incentive based regulation

› The strong market/sales position off-bound benefits from regulation

› Regulation requires early implementation of quality standards

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The German gas business is moving towards competition

› Still historical structures, but increasing competition

› EEX: trading with gas contracts since July 2007

› Consolidation of market areas in 2008 under discussion

› Key factors for success in a competitive environment

› Access to gas volumes at competitive prices

› Network access

› Portfolio optimization; structuring of gas offers

› EnBW has a profitable downstream position in the market

EnBW already has a profitable downstream position in the gas market

EnBW is extending its midstream position in deepening the supply chain and

extending its capacity

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Content

› Who We Are



› Strategy

› Performance

› Outlook


EnBW solidly on track for growth.

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Growth as the logical next step

Market

Opening

1998 2003 2007

Business

ModelConsolidation Growth

2001

EnBW is well set for growth:

› Sales: strong home market, successful growth off-bound

› Generation: cost effective & reliable asset base

› Business model & risk management : well set for competition

› Gas: growth on base of a favourable downstream position

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Strategic areas for growth -1-

› EnBW aims to double its enterprise value to approx. € 30 bn

within the next 8-10 years, meaning a future CAGR of 7%

› Supervisory board approved € 7.6 bn for investments for the next

three years

› Growth mainly via acquisitions on an international scale and the

expansion of renewable energies

› Sales: Growth potential through Yello

› Currently 1.4 mn customers

› New customers: nearly 200,000 in 2007

› Target for 2008: another 200,000 new customers

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› Dual strategy in the field of generation:

› Expansion of conventional generation facilities (the objective

is to build four or five new power plants in the next six years)

› Construction of new coal-fired power plants

› Full use of cooperation options

› STEAG, EDF, major customers

› Expansion of green electricity:

› 20% quota by 2015, currently 16% quota

› Expansion in wind energy

› Product development “Energy Efficiency”

› Growth on an international scale:

› e.g. hydro-power projects in Turkey

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› Maintain and extend grids as a core competence on the basis

of a strict cost regime

› Pursue further growth due to acquisitions, cooperation and

additional concession agreements

› Focus and adjust trading activities

› Leverage of risk management (additional commodities,

extension of value chain)

› Integration of subsidiaries

› Trading activities as a service provider for third parties

› Gas: Expansion in the mid-/upstream business

› LNG

› Gas storage facilities

› Cooperation with EDF

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EnBW´s business model: An integrated and optimized management of the value chain

“Standard” integrated utility approach

Advantages:

› Reduction of P&L volatility (hedging & wholesale-based pricing)

› Ability to generate value from the flexibility of EnBW’s assets

› Ability to back growth in EnBW’s customer base

Generation Portfolio Sales PortfolioFuels& CO2

Sales

WholesaleMarket

for Electricity Pricing

“Back-to-Back”

HedgeOptimisationDispatch

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Clear customer orientation remains EnBW’s focus in its successful segment orientated multi-brand approach

EnBW as Premium energy brand with a clear

profile for the Baden-Württemberg mass

market based on

Yello as EnBW‘s unique national brand for the

German national mass market as a valid

alternative for every customer

The national brand for ecological oriented

households and SME's

Key

Accounts

Key

Accounts

LDC LDC

Public

Authorities

Public

Authorities

Small

Accounts

Small

Accounts

Accounts Accounts

Mid AccountsMid Accounts

Retail multi customer brand approach for Germany Sales strategy for business customers

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EnBW’s financial strategy remains unchanged: focus on a strong financial position and sustainable value generation

› Balanced dividend policy based on EnBW’s financial strength

› Commitment to maintain a rating in the A range in the medium

term to keep financial flexibility

› Focus on value creation in all business units: continuous

increase of value added

› Acquisition and investment criteria on the basis of strict

financial hurdle rates (i.e. risk adjusted return requirements)

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Content

› Who We Are



› Strategy

› Performance

› Outlook


Based on EnBW’s strategy EnBW wants to grow externally and

organically further improving its key figures.

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EnBW’s overall business results are strong, despite the perceivable effects of regulatory measures

Performance:

Financial position:

Portfolio:

› Performance 2007 driven by negative regulatory impacts being

overcompensated in the competitive market areas

› Dividend increased by 29.5% for 2006. EnBW is aiming for a further

two-digit increase for fiscal year 2007*

› EnBW’s results exceeded € 10 bn in revenues and € 1 bn in group net

profit in Q3 2007

› EnBW’s financial debt declined further mainly due to the strong free

cash flow

› EnBW strengthened its position in the core markets: enlargement of

consolidated group (full year consolidation of SWD**)

› EnBW plans to invest strongly in expanding generating and

distribution facilities to face challenges of German utilities

environment: Capex totaled €500 mn in Q3 2007)

*subject to the approval of the AGM on April 25, 2008

** Stadtwerke Düsseldorf AG

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Revenues increased driven by consolidation, volume and price effects in the electricity segment

* Excluding electricity tax and natural gas tax

› Total revenues* increased by 14.1%

(€1,303 mn) exceeding €10 bn; adjusted for

consolidation effects revenues increased

by 8.6% (€836 mn)

› Electricity segment:

› Both volume (trading, B2B) and price

effects (wholesale market) mainly

triggered revenue increase

› Gas segment:

› Revenues dropped by 15.2% (20.1%

w/o consolidation effects) owing to

the mild weather and increased

competition

› Energy and environmental services:

› Increase of 41.9% mainly based on

consolidation effects (esp. SWD)Electricity Gas Energy and

environmental

services

Total

Jan 1 - Sep 30, 2006

Jan 1 – Sep 30, 2007

Prior-year figures adjusted

502354

9,215

10,518

6,917

8,367

1,945 1,649

+14.1%

+21.0%

-15.2%

+41.9%

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EBIT increased by 11%; the adjusted EBIT kept its level bearing the burdens of lower gas sales and regulatory influences

› Total EBIT rose by 11.0% (€126 mn)

thanks to the non-operating result; last

year’s non-operating result was affected

by write-downs with regard to T-plus

› The adjusted EBIT increased slightly due

to the effects described on the EBITDA

level

1261 1326

1,148

1,154

Jan - Sep 2006 adj. EBIT

year-on-year

Non-operating

EBIT

year-on-year

1,149

1,281

Jan - Sep 2007

+0.1%

+11.0%

Adjusted EBIT in € millions

Extraordinary items in € millions

Prior-year figures adjusted

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EnBW’s share price indicates the strong operational performance

› Closing price: € 56.31

› High: € 57.82

› Low: € 48.01

› Market capitalisation: € 13.8 bn

› Performance over the year:

› EnBW: + 11.4%

› DAX: + 18.9%

› DJ Euro Stoxx Utilities: + 13.8%

Development of the EnBW share from January 1 to September 30, 2007

› EnBW has appointed a Designated Sponsor as of 1 January 2007 to increase the fungibility of its

share

› EnBW intends to become listed in the Prime Index at the Frankfurter Wertpapierbörse to increase

the public awareness of its stock

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Content

› Who We Are



› Strategy

› Performance

› Outlook


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Outlook for fiscal year 2007 (year-on-year)

Adjusted EBIT

Capex 2007–2009* € 3.2 bn

Electricity

Consolidation***

*Prerequisite: profitability and approval by the proper authorities; **Condition: positive development in earnings ratios on the planned scale, i.e. improvement in operating performance,

corresponding development of economic and political conditions relating to the energy industry and of prices for retail and industry customers. However, there is also a risk that operating

problems as well as other currently unforeseeable factors could have a negative influence on earnings; *** SWD (January to March), ESW ; ****Including trade

Gas

Energy and environmental services

Outlook given end of

Dividend**

External revenues****

Adjusted EBIT

External revenues

Adjusted EBIT

External revenues

Adjusted EBIT

External revenues

€ 3.2 bn › Electricity segment:

› Slight increase due to positive operating

performance and focus on profitable

client segments compensating negative

regulatory effects

› Gas segment:

› Decreasing due to regulation,

liberalisation and mild climate

› Energy and environmental services:

› Increase due to strong results in the

water business, the extension of the

waste incineration facilities in

Stuttgart-Münster and T-Plus

› Consolidation effects are mainly driven by

the full-year consolidation of SWD and the

consolidation of ESW

› EnBW pursues a further positive

development of the dividend

i

i

i

i

i = No quarterly review of revenues

Group 2006 Q3 2007

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Content

› Who We Are



› Strategy

› Performance

› Outlook


33

The next conference call will take place on February 19, 2008: Results of the fiscal year 2007

February 19, 2008Annual Report 2007

Conference time: 15:00 CET

April 25, 2008Annual General Meeting 2008


May 9, 2008Interim report: January–March 2008


August 1, 2008Interim report: January–June 2008


November 13, 2008Interim report: January–September 2008


enbw energie baden-württemberg ag · 2020-06-03 · enbw energie baden-württemberg ag...

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