Essen, 13 March 2018

RWE posts good performance in fiscal 2017 and plans higher dividend for 2018

  • Adjusted EBITDA up 7%, adjusted net income up roughly 60% in 2017

  • Net debt falls by €2.5 billion, equity ratio rises to 17%

  • RWE plans a dividend of €1.50, including a special dividend of €1.00, for 2017, with the 2018 ordinary dividend to rise to €0.70

Rolf Martin Schmitz, CEO of RWE AG: “In 2017, our goal was to strategically reposition RWE and consolidate its finances. We were successful in both of these undertakings. We are in good shape again, with a solid financing structure, lower debt and a higher equity ratio. In operational terms, our trading business did well in 2017, along with our power generation activities. All of this forms a good basis for the future, as we move forward with a sharp focus on our core business: ensuring security of supply.”

Fiscal 2017 was a good year for RWE, thanks to better-than-expected results in the European Power division, a robust earnings contribution from Energy Trading and good progress with the ongoing efficiency-enhancement programme. Consequently, the company’s key earnings figures were better than last year. Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) amounted to €5.8 billion, up from €5.4 billion in 2016. At €1.9 billion, net income was substantially higher than last year, when a net loss of €5.7 billion was reported due to impairments. Adjusted net income came in at €1.2 billion, well higher than last year’s result of €0.8 billion.

For 2018, RWE projects adjusted EBITDA in a range of €4.9 billion to €5.2 billion, and adjusted net income between €700 million and €1.0 billion. This represents a modest decline, but comes as no surprise since 2018 will merely reflect the full impact of the very low levels of electricity prices seen in past years. As Rolf Martin Schmitz, CEO of RWE AG, explained: “We’re prepared for this. We planned to cut our cost base by €300 million annually between 2016 and 2019 and we have already achieved more than half of this. Furthermore, we can observe a slight improvement in wholesale electricity prices. On the whole, we are optimistic about our future prospects.”

For fiscal 2017, the Executive and Supervisory Boards of RWE AG will propose to the Annual General Meeting on 26 April the payment of a dividend of €1.50 for common and preferred shares. This includes a special dividend of €1.00. For 2018, the goal is to increase the ordinary dividend to €0.70.

Security of supply remains the key focus in 2018
RWE continues to focus on its core business, security of supply, with operational excellence and strict cost discipline as the basis for the company’s success going forward. In particular, the portfolio of gas-fired power plants will be further developed. One specific area of focus in this field will be the cooperation with industrial customers. In terms of generation capacity, gas is already RWE’s main source of energy, with a share of around 40%, making the company one of the leading competitors in Europe. Additional growth is targeted in energy trading, in particular in the LNG business. In the interests of promoting new solutions to ensure security of supply over the long term, the company has a pipeline of around 50 larger and smaller projects which are being pursued independently or with partners. They range from new storage facilities for electricity and the expansion of customer services to the use of biomass fuels from agricultural waste products.

Overview of segment results
In Lignite & Nuclear, adjusted EBITDA declined as expected, falling to €671 million (previous year: €1,079 million), due to lower realised wholesale electricity prices compared to the previous year. This decline was partially offset by the fact that we no longer had to pay a nuclear fuel tax and the ongoing efficiency-enhancement programme.

The adjusted EBITDA of the European Power division amounted to €463 million (previous year: €377 million). At the start of 2017 we were still expecting a decline in this division. The increase of around 23% resulted from the above-average earnings of the commercial optimisation of our power plant fleet, improvements in efficiency and an extraordinary book gain on the sale of our former power plant site Littlebrook.

The adjusted EBITDA of the Supply & Trading division rose to €271 million (previous year: -€139 million), a strong rebound compared to 2016 and well above the expected average level of around €200 million.

Our financial investment, innogy, recorded an increase of 3% in its adjusted EBITDA. Details on its earnings were published on 12 March.

As of 31 December 2017, the net debt of the RWE Group amounted to €20.2 billion, down €2.5 billion on the figure recorded by the end of 2016. This was mainly due to the good earnings development, the refund of the nuclear fuel tax and lower pension obligations.

‘RWE stand-alone’ indicators
In addition to its fully consolidated financial reporting, since 2017 RWE has also publishes additional indicators for ‘RWE stand-alone’. This covers the core business areas Lignite & Nuclear, European Power and Supply & Trading, along with the innogy dividend. These earnings indicators show the origin of the available free cash flows of funds, which form the basis for the dividend. The adjusted EBITDA of ‘RWE stand-alone’ amounted to €2.1 billion (previous year: €1.9 billion), with adjusted net income of €973 million (previous year: -€20 million). Net debt directly attributable to RWE declined by €2.3 billion to €4.5 billion as of 31 December 2017.

As Markus Krebber, Chief Financial Officer of RWE AG emphasised, “The positive development of the ‘new RWE’ share price and the stabilisation of our rating confirm investors’ confidence in our strategic and financial course.”

Forward-looking statements
This IR release contains forward-looking statements. These statements reflect the current views, expectations and assumptions of the management and are based on information currently available to the management. Forward-looking statements do not guarantee the occurrence of future results and developments and are subject to known and unknown risks and uncertainties. Actual future results and developments may deviate materially from the expectations and assumptions expressed in this document due to various factors. These factors primarily include changes in the general economic and competitive environment. Furthermore, developments on financial markets and changes in currency exchange rates as well as changes in national and international laws, in particular in respect of fiscal regulation, and other factors influence the company's future results and developments. Neither the company nor any of its affiliates undertakes to update the statements contained in this IR release.



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