RWE Generation SE –Tackling the challenges ahead

Essen, 12 February 2014

Dr. Frank WeigandChief Financial OfficerRWE Generation SE

1

Forward Looking Statement

This presentation contains certain forward-looking statements within the meaning of the US federal securities laws.Especially all of the following statements:> Projections of revenues, income, earnings per share, capital expenditures, dividends, capital structure or other financial items;> Statements of plans or objectives for future operations or of future competitive position;> Expectations of future economic performance; and> Statements of assumptions underlying several of the foregoing types of statementsare forward-looking statements. Also words such as “anticipate”, “believe”, “estimate”, “intend”, “may”, “will”, “expect”, “plan”, “project” “should” and similar expressions are intended to identify forward-looking statements. The forward-looking statements reflect the judgement of RWE’s management based on factors currently known to it. No assurances can be given that these forward-looking statements will prove accurate and correct, or that anticipated, projected future results will be achieved. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Such risks and uncertainties include, but are not limited to, changes in general economic and social environment, business, political and legal conditions, fluctuating currency exchange rates and interest rates, price and sales risks associated with a market environment in the throes of deregulation and subjectto intense competition, changes in the price and availability of raw materials, risks associated with energy trading (e.g. risks of loss inthe case of unexpected, extreme market price fluctuations and credit risks resulting in the event that trading partners do not meet their contractual obligations), actions by competitors, application of new or changed accounting standards or other government agency regulations, changes in, or the failure to comply with, laws or regulations, particularly those affecting the environment and water quality (e.g. introduction of a price regulation system for the use of power grid, creating a regulation agency for electricity and gas or introductionof trading in greenhouse gas emissions), changing governmental policies and regulatory actions with respect to the acquisition, disposal, depreciation and amortisation of assets and facilities, operation and construction of plant facilities, production disruption or interruptiondue to accidents or other unforeseen events, delays in the construction of facilities, the inability to obtain or to obtain on acceptable terms necessary regulatory approvals regarding future transactions, the inability to integrate successfully new companies within the RWE Group to realise synergies from such integration and finally potential liability for remedial actions under existing or future environmental regulations and potential liability resulting from pending or future litigation. Any forward-looking statement speaks only as of the dateon which it is made. RWE neither intends to nor assumes any obligation to update these forward-looking statements. For additional information regarding risks, investors are referred to RWE’s latest annual report and to other most recent reports filed with Frankfurt Stock Exchange and to all additional information published on RWE's Internet Web site.

2

EindhovenHelmondBergen op Zoom

IneosMoerdijk s-Hertogenbosch

Claus

Amer

Swentibold

IbbenbürenEmsland

Enschede

EricaGreat Yarmouth

KlazienaveenLittle BarfordPembroke

Staythorpe

Aberthaw

Matra

Biblis

Gundremmingen

Eemshaven

Ensdorf

BochumDortmund

Gersteinwerk

Goldenberg

Dormagen

Niederaußem

Fabrik Berrenrath

Fabrik Fortuna-Nord

Fabrik Frechen

FrimmersdorfNeurath

BergkamenDatteln

HerneKnepperScholvenVoerde

Walsum

Westfalen

Huckingen

GK West

Mannheim

Plomin

Saar-Energie

Weisweiler

Lignite Hard coal Gas

Fawley

Mülheim-Kärlich

Nuclear

Littlebrook

Oil

Portfolio in 2012(100 % = c. 48 GW)

Fuel type(%)

Split by country

(%)

RWE power plants in Europe

TilburyDidcot

Hydro

Vianden

Schluchsee

Biomass

Herdecke

Cuijk

Since 1 January 2013 RWE’s conventionalelectricity generation is under one roof

6027

101

24

2530

7

55

4

* Under the responsibility of RWE East

*

*

Denizli

C. 50 plants, c. 18,000 employees

LigniteHard coalGasNuclearOilHydroBiomass

Germany

UK

Benelux

Turkey

3

Mid-term earnings perspective of Conventional Power Generation

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

-0.52012 2013 m-t-m2012

Operating result in € bn

CO2

Outright position

Volumes

3.3

CDS/CSS

Free allocation of c. 120 mt of CO2 certificates in 2012: ~€1.2 bn

Impact from decline inrealised outright power pricefrom €55/MWh to ~€37/MWh

Mainly shut down of 150 MWlignite units and Tilbury

OthersEfficiencies2012-2017

Mark-to-market21

1 Others: e.g. compensation payments for construction delays in 2012; changes in the regulatory framework (e.g. biomass NL); increase in depreciation

2 Mark-to-market as of November 2013 at market prices of around €37/MWh for German baseload forwards

4

> Current market situation leads to severe earnings pressure despite significant efficiency improvements

> At current market conditions, approx. 1/3 of our power plants show a negative con-tribution to operating result and between 20% and 30% is free cash flow negative

> Old gas fired power plants are under most pressure but even some new state ofthe art gas plants are cash flow negative

> Older hard coal plants are under pressure mid-term due to lack of flexibility

OR2 > WACC

OR > 0

FCF2 > 0

c. > 50% – 60%

c. > 60% – 70%

c. > 70% – 80%

Significant pressure on our generation portfolio

1 Rough profitability analysis for 2013 to 2015 in % of installed capacity of RWE‘s conventional generation portfolio (economic stake)in Germany, UK and NL (average c. 44 GW) based on market parameters as of January 2013.

2 OR = operating result; WACC = weighted average cost of capital pre tax; FCF = Free cash flow = Revenue – Cash costs

Profitability of RWE’s conventional generation portfolio1

5

Internal focus on cost reduction and portfolio optimisation and external focus on development of the market model

What are we doing about that?

> Operational: Cash Improvements through efficiencies> Structural: Portfolio-Optimisation

Internally

> Interaction with stakeholders to further develop market models– Security of supply– Climate protection and sustainability– Affordability of electricity

Externally

6

Efficiency programme “Neo” covers all areas of RWE Generation via dedicated projects

DE NL UK Parti-cipa-tions

Hard Coal & Gas

Nuclear Lignite Hydro RWE Tech-nology

Mana-gement

& Support

CAO1

External spend

Technical Functions

1 CAO - Commercial Asset Optimisation

7

¾ of target already specified by ideas / measures

Overall target

to be specified by

concrete measures

Already specified by ideas / measures

At least 80 % to be effective in

operating result~ 75%

~ 25%100% = high

3 digit €m

1 DoI = Degree of Implementation

DoI1 logic applies

Cash improvement target

8

Cash improvement measures will ramp-up until end of 2016, with full financial effect in 2017

20-30%

50-60%

~ 90%100%

2014 2015 2016 2017

Cash improvement target

9

Synergy and restructuring potential is targeted in project “NEO” across all areas of the generation business

> Improvement of front to back end processes in fuel management> Active ageing management for power plants

Nuclear

> Further reduction of start-up time and costs> Optimisation of hard-coal transportation cost

> Improvement of technical processes in plants, mines and refining> Reorganisation of overhauls and services through out lignite system

Lignite

> Increase of production by ecological and technical improvements> Streamline organisation by realising internal and external synergies

Hydro

> Alignment of resources to predicted demand> Integration of Management Support functions into RWE Generation

RWE Technology

> Elimination or service level reduction of non crucial activities> Optimisation of processes and streamlining of the organisation

Management & Support Functions

> Optimisation of processes / structure> Integration of activities in Germany and NL / Reduction of IT complexity

Commercial Asset Optimisation

> Switch to cheaper supplier (e.g. to non-OEM-supplier) > Standardisation / harmonisation of product requirements

External Spend

Hard Coal & Gas

> Tailored technical co-operations across plant portfolio> Introduction of “Competence Heads” for technical components

Technical Functions

10

Decision on capacity measures

Measure Plant MW1 Fuel Location Date

Decom-missioning

Amer 8 610 Hard coal NL Q1-20162

Long-term mothballing

Moerdijk 2 430 Gas NL Q4-2013

Gersteinwerk F 355 Gas – steam turbine DE Q3-2013

Gersteinwerk G 355 Gas – steam turbine DE Q2-2014

Weisweiler H 270 Topping gas turbine3 DE Q3-2013

Weisweiler G 270 Topping gas turbine3 DE Q3-2013

2 mid-size units 85 Gas NL Q1-2013

Summer mothballing

Emsland B 360 Gas – steam turbine DE Q2-2014

Emsland C 360 Gas – steam turbine DE Q2-2014

Terminationof 3 contracts

Confidential 1,170 Hard coal DE Q4-2013 –Q4-2014

Total 4,265 MW1 Net nominal capacity | 2 Depending on the final decision on the Dutch “Energieakkoord”, with a decision expected by the end of August 2013 | 3 At a lignite plant

11

Development of the electricity market model under the principle of one goal - one instrument

Non-discriminatory system to reward availability of power generation capacity

Market integration of renewable energy; reform of the Renewable Energy Act

Goal: Security of supply Goal: Affordable electricity

Emissions trading system with a long-term goal to reduce CO2 emissions

Goal: Climate protection

RWE AG PAGE 1

German energy politics

12/02/2014

Essen, 12 February 2014

Dr. Peter HeinacherHead of Corporate AffairsRWE AG

RWE AG PAGE 2

New cabinet‘s agenda compiled at Mesebergconclave

12/02/2014

The new cabinet’s conclave at Meseberg Castle (21 Jan. 14)

Picture: Bundesregierung

Cabinet’s energy agenda

Renewables Act

Capacity Mechanism

Climate Action

RWE AG PAGE 3

Key protagonists

12/02/2014

Sigmar Gabriel Rainer Baake

Source: A. Müseler Source: Heinrich-Böll-Stiftung

RWE AG PAGE 4

Pressure from Brussels on German energypolitics

12/02/2014

J. Almunia

Renewables support likely to be state aid but in line with Com’s 2008 guidelines

Exemptions for the energy intensive industry may be considered state aid not in line with Com’s 2008 guidelines

DG competition opened inquiry into German Renewables Act 2012 on 18 Dec. 2013

RWE AG PAGE 5

Wind onshore: 2,500 MW/a cap, automatic digression of FIT; locational differentiation

Wind offshore: 6.5 GW target until 2020, digression of FIT in 2018/19 PV: 2,500 MW/a cap, automatic digression of FIT Biomass: 100 MW/a cap, automatic digression of FIT

Renewables Act heading for the right directionTo be finalized by August 2014!

12/02/2014

Support

Mandatory direct marketing for new installations as of 2014 (500 kW and more), 2016 (250 kW and more), 2017 (100 kW and more)

Default buyer General auctioning of renewables support as of 2017

Market

Review of exemptions from renewables surcharge for energy intensive industry according to EU state aid regulation

90% renewables surcharge for new auto-generators (70% for CHP and renewables)

5,28 ct/kWh allowance for existing auto-generators

Cost allocation

RWE AG PAGE 6

The Renewables Act channels green value added into the States (“Länder”)

12/02/2014

Negative net total

Positive net total

Net totals of EEG-payments by the states (2012)

Source: BDEW

RWE AG PAGE 7

Capacity mechanism will be thenext no. 1 task

12/02/2014

Government program acknowledges the necessity of a capacity mechanism

Meseberg conclave confirmed this view

Four competing concepts for capacity mechanisms

Power plant reserve or

enhanced balancing market

Decentralized capacity market

Centralized capacity market

Centralized, discriminatory

capacity market

e.g.BNetzA

Bundeskartellamt

BDEWVKU

France

EWIUK

Öko-InsitutAgora

RWE AG PAGE 8

Climate action plan prior to Paris 2015

B. Hendricks

Government program states that national climate action will be shaped in the light of the Paris 2015 results

Nevertheless, Environmental Ministry seems to be determined to table a national action plan before

Yet unclear how binding a possible Climate action plan will be in a legal perspective

Ministry of Environment may table a Climate Action Plan

12/02/2014

RWE AG PAGE 9

Back up

12/02/2014

RWE AG PAGE 10

RWE is 3rd in the EU in terms of gas-fired power plants, in Germany we are number one

RWE and big European utilities1: Gas capacity in the EU and Germany 2012 (GW)

EnBW 1.2

Centrica 3.7

EdP 3.9

Vattenfall 4.4

Iberdrola 8.3

EDF 13.0

Enel 14.3

RWE 15.6

Eon 19.5

GDF 25.3

1 including customer plants and participations, e.g. enviaM, also including temporarily mothballed capacityMost important sources (for separation of gas-fired capacity sometimes more sources necessary)RWE: Facts & Figures und Annual Report 2012Eon: Annual Report 2012, Facts & Figures March 2013GDF Suez: Asset Table 2012EDF: Facts & Figures 2012, Analyst Fact Pack 2012, Platts Power Plant Database 2010ENEL: Presentation Results 2012, Plan 2013-2017, Website Endesa, ENEL List of thermal Power Plants in ItalienEnBW: Annual Report 2012Vattenfall: Info package 2012, Website Power Plant List, BNetzA Power Plant List (DE)Iberdrola: Annual Report 2012, Website Iberdrola (Interactive analysis)

Gas capacity (partly dual fuel)Label

5.2

0.2

EnBW 1.2

GDF Suez

Vattenfall 1.7

Eon 4.7

RWE

12/02/2014

RWE AG PAGE 1112/02/2014

Company ranking for pump storage capacityconnected to the German grid

2.793

1.755

947

751

289

220

138

127

99

2.119

Vattenfall

RWE

EnBW

E.ON

Voralberger Illwerke

Tiroler Wasserkraft

Statkraft

markE

GDF SUEZ

Stadtwerke München

Turbine power

Figures in MW

,

,

,

RWE AG PAGE 12

1

1

2

3

7

E.ON

Steag

EnBW

RWE

Vattenfall

Ranking of > 100 MWel CHP plant operators in Germany

Figures in GWth

12/02/2014

RWE AG PAGE 13

0 500 1.000 1.500

EDFIberdrola

SWMEnBW

StatkraftStatoil

CentricaRWESSE

E.ONVattenfall

DONG

With ca. 1,000 MW installed capacity by 2015, we will be one of the leading offshore operators

Strong position in competitor comparison (Capacity in MW)*

* Source: RWE Innogy internal analysis - Offshore competitor database.

5

3

In operation

Under construction

,, , , ,

12/02/2014