EWE AG. Dirk Eichholz Head of Group Finance and Investor Relations

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1 EWE AG Dirk Eichholz Head of Group Finance and Investor Relations Unicredit - European Energy & Utilities Credit Conference London November 2012

2 Disclaimer By attending the meeting where this presentation is made, you agree to be bound by the limitations contained below. This presentation is confidential and does not constitute or form part of an offer for sale of or solicitation of any offer to buy any securities. Certain statements in this presentation are forward-looking and, by their nature, involve a number of risks, uncertainties and assumptions which could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Forwardlooking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. 2

3 Agenda Company Overview Financial Profile AGENDA Energy Turnaround Business Model & Strategy 3

4 Innovation with tradition The history of the EWE Group Merger creating Stromversorgungs AG Oldenburg-Ostfriesland (STROSAG AG) 1943 Merger with Landeselektrizitätsverband Oldenburg (LEV) creates the regional electricity supplier EWE AG 1959 The company starts supplying natural gas 1962 First import agreement for Dutch natural gas 1975 The first natural gas storage facility becomes operational 1990 Natural gas supply activities established in eastern Brandenburg 1996 Entry into the telecommunications market 1998 Merger with the neighbouring regional utility company ÜNH gives EWE access to one million electricity customers 1999 Expansion into Poland 2001 ICT business area established 2007 Entry into the Turkish energy market 2009 EnBW AG becomes a new strategic partner and acquires a 26 per cent stake in EWE Another growth spurt: EWE acquires the Bremen-based energy supplier swb 4

5 Company Overview EWE AG - Current ownership structure Majority under municipal ownership 15% EEW* Energieverband Elbe-Weser Beteiligungsholding GmbH WEE* Weser-Ems- Energiebeteiligungen GmbH 59% 26% EnBW Energie Baden-Württemberg AG Stable shareholder structure as symbol for EWE s regional solidarity Shareholder structure supports EWE s financial policy * WEE and EEW together form the Ems-Weser-Elbe Versorgungs- und Entsorgungsverband. The members of this association are 21 districts and towns within the Ems/Weser/Elbe region. 5

6 Company Overview EWE - Our Vision shows what drives us Environmentally friendly energy and quality of life for local people. Key competencies for sustainable, intelligent energy supply systems Developing and operation of modern energy supply systems entirely in-house An energy industry pioneer Strong regional roots EWE - The future of energy from a single source 6

7 Company Overview EWE Group Key Figures 2011 Electricity Natural gas TC Clients Approx. 1.4 million Approx. 1.5 million 670,000 (incl. htp clients) Sales 18.8 billion kwh 60.4 billion kwh Network 91,700 km 68,700 km 34,100 km EWE Group 8,828 employees (average for the year) 4,693 employees (average for the year) 7.5 billion sales 4.66 billion sales million net profit for the year 7

8 Financial Profile HY 2012 EWE Group Key Financial Figures ( m) EWE Group 01-06/ /12 Difference Difference [%] 01-12/11 in mill. Sales 3.838, ,3 389,4 10,1% 7.455,4 EBITDA 321,7 518,1 196,4 61,0% 470,7 EBIT -61,3 309,6 370,9 604,7% -124,3 Investments 225,0 265,0 40,1 17,8% 626,8 Employees* ,5 % * = Ø number of employees 8

9 Financial Profile HY 2012 EWE Group Key Financial Figures ( m) EWE Group 01-06/ /12 Difference Difference [%] 01-12/11 in mill. Result for the period -185,9 167,7 353,5 190,2% -281,9 Operating Cash Flow 14,7 339,7 325, ,2 % 356,1 FFO 475,7 536,6 60,8 12,8% 706,3 Dividend -88,2-88,4-0,2-0,2% -88,2 Book Equity ,0% Total Debt (net) 2.486, ,1-285,8-11,5% 2.512,9 Pensions ,5% Balance Sheet total 9.662, ,3 571,1 5,9% 9.808,5 9

10 Energy Turnaround Targets in Brussels are clearly defined and leading to a significant transformation process Brüssel Berlin Reduction of Greenhouse Gases 20 % 40 % Improving Energy Efficiency 20 % 20 % Increase the Proportion of Renewable Energy 20 % Powergeneration 35 % Heat Sector 14% Proportion Cogeneration Electricity 25 % Traffic Proportion of renewable energy on traffic to 10% Fuel additive of biomethane to 20% Targets until

11 Energy Turnaround EWE committed itself early to tackle the challenges facing the future of energy ENERGY CONSERVATION ENERGY EFFICIENCY E 3 RENEWABLE ENERGIES 11

12 Energy Turnaround In the future, power generation will generally be more decentralised 12

13 Energy Turnaround Grids are a key factor for the integration of renewable energies Wind energy Biomass Grids Environmentallyfriendly building Storage power station Electromobility 13

14 Business Model & Strategy The cornerstones of the strategic alignment Focus Our core expertise in energy, telecommunications and IT sets us up to provide a sustainable energy supply. We focus on activities which represent a sustainable strategic and operational addition to our core business Concentrated growth We are aiming to achieve profitable growth in areas which will allow us to play an active role in reforming north Germany's energy supply Regional roots We use our regional connections and many years of experience in the area to actively involve the region and its people in the energy reform. 14

15 Business Model & Strategy The strategic considerations comprise every business unit Generation / Waste disposal Infrastructure (incl. TC- Networks) Storage facilities Renewables Strategic Considerations Sales (incl. TEL) Portfolio management New Markets IT 15

16 Business Model & Strategy Overview of the main strategic decisions Business Unit Guidelines Infrastructure (incl. TC networks) Generation/waste disposal Renewables Storage facilities Sales (incl. TEL) Portfolio management Focus on selective and opportunistic growth in electricity networks... customer-specific generation solutions... expanding onshore wind through in-house development in partner models and biogas processing... increased marketing of storage capacities... excellent service as a regional provider of integrated energy and telecommunications products... optimized and low-risk portfolio management IT... supporting our core energy business New Markets... organic growth through existing shareholdings 16

17 Business Model & Strategy Clearly defined targets set the framework for future actions Financial Target = Leverage ratio Target Ratio: Net Debt / EBITDA = 3,5x Earnings target = EBIT-Return Target ratio: = 8 per cent Assets target = Equity ratio Target ratio: = 30 per cent Target: To analyze and govern the company s performance 17

18 Business Model & Strategy Investment Strategy Investments in Strategic Business Areas Investments are a decisive factor to provide the basis for further growth and synergy potentials in order to underpin profitability Major Investments Renewable Energies Offshore Wind Farm Riffgat (108 MW) Networks mainly connection of renewable energy production due to renewable energy act EEG Electricity Production Gas-steam turbine power plant in Bremen (445 MW) Gas Storage gas storage project Jemgum currently under construction (Working Gas Volume approx 320 Mio. qm³) 18

19 EWE well prepared for future challenges Strong regional focus Sustainable business model Focus on superiorcustomer satisfaction and service quality Stable cash flows High network competences Foresightful financial management 19

20 Thank you for your attention Contact EWE Aktiengesellschaft Tirpitzstraße Oldenburg Tel /