The BKW Group«We are shaping the future of energy – straightforward, reliable and integrated»
COMPANY PRESENTATION, LONDON 28.04.2016
| BKW |
Contents
Overview
Financial results 2015
Strategy
Summary
28.04.2016ROADSHOW LONDON
| BKW | 28.04.2016ROADSHOW LONDON 3
Key figures
52.5%
10.0%
6.7%
8.1%
22.7%
Canton of Berne
Groupe E Ltd.
E.ON SE (exchangeable bond)
Treasury shares (convertible bond)
Free float
37.4%
Operating Revenue CHF 2,645 m
Operating Profit (EBIT) CHF 382 m
Operating cash flow CHF 576 m
Liquidity CHF 1,4 bn
Net debt CHF 292 m
Employees 4,000 FTE
Capacity 3,300 MW
Generation 12 GWh
Distribution grid 22,000 km
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Business areas
Energy Grid Services
production, trading, sales
- Revenue FY15: CHF 1,600 m- Employees: 830 FTE
own distribution grid
- Revenue FY15: CHF 760 m- Employees: 640 FTE
infrastructure services
- Revenue FY15: CHF 430 m- Employees: 1,850 FTE
| BKW |
BKW, a growing company
Financial results 2015
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Strategy implementation picks up speed
Rapid growth achieved in services business: operating revenue +34%
BKW able to compensate about three-quarter of negative electricity price- and FX-effects with operative measures
Consecutive strong results achieved: EBIT +10%
Operating cash flow on record levels: +7% compared to high 2014
Net debt reduction -38%
322347
2013 2014 2015 2013 2014 2015
Operating profit/EBIT Operating cash flow
CHF m
+7%
+10%
317
382
538
576
CHF m
| BKW |
EBIT history
Solid and stable development of EBIT despite very adverse business environment
* adjusted for exceptional impairment charges for power plants
239
324 317347
382
0
100
200
300
400
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
**
*
CHF m
60 EUR/MWh
30 EUR/MWh
Market priceof electricity
28.04.2016ROADSHOW LONDON
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Strong EBIT thanks to operational performance and one-off effects
20142015
beforeone-off effects
Significant compensation of negative price and FX effects
2015reported
One-off effects
382
347
CHF m
309
73
+10%
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Operating revenue and EBIT per business area
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Consecutive high operating cash flow
Cash flow on record level
292322 311
538576
0
100
200
300
400
500
600
2011 2012 2013 2014 2015
CHF m
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Investments: Strategy implementation
Maintenance/
replacement
– 40% of investments in services
– 40% of investments in maintenance/replacement,
whereof CHF 110m in Grid
– in line with long-term capex planGrowth
CHF 390m
40% or CHF 160m investments in maintenance/replacement
GrowthServicesEnergy: Renewables
Maintenance/replacementGridEnergyOther
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Further improvement of already sound financial situation
Net debt reduced by 38%
797
1,2641,394
-1,590-1,734 -1,686
-793
-470-292
-2000
-1500
-1000
-500
0
500
1000
15002013 2014 2015CHF m
Cash & equivalents & current financial assets
Financial debt
Net financial debt
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Share price development and dividend history
Performance 2015: +29%, proposed dividend on PY level
Dividend history
SPI: Swiss Performance Index
25
27
29
31
33
35
37
39
41
30.12.2014 30.01.2015 28.02.2015 31.03.2015 30.04.2015 31.05.2015 30.06.2015 31.07.2015 31.08.2015 30.09.2015 31.10.2015 30.11.2015 31.12.2015
BKW
SPI
+29%
0.00
0.40
0.80
1.20
1.60
2.00
2011 2012 2013 2014 2015
CHF
2015:
Dividend: CHF 1.60
Dividend yield: 4.2%
Payout ratio*: 46%* Based on net profit after exceptional effects
Strategy
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20 €/MWh
Market environment
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
2011 2012 2013 2014 2015 2016
Deterioration of profits oftraditional power generation
Reduced cash flows whileinvestments for maintenanceand replacement stay stable
60 €/MWh
-50%• CO2 reduction
• Trend to renewables
• Trend to decentral production
• From consumers to prosumers
• Sluggish economy in Europe/CH
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Our strategy at a glance
2024
Secure sustainable cash flow generation Compensate falling profits from traditional power generation Reduce dependency form energy prices Enable BKW to profit from changing “energy-system”
"Evolving from a traditional electricity producer to a leading providerof energy and infrastructure services"
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Business areas
Energy Grid Services
strengthening developing expanding
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Strengthen Energy
Optimize existing portfolio
- Cost efficieny- Technologies
Invest in regulated technologies
- Wind- Small-scale Hydro
Expand trading for volatile and decentralenergy production
Decommissioning nuclear power plant Muehlebergin 2019
Operating costs
2015 Decommissioning application submitted
2019 Shut-down of power plant
2034 Decommissioning work finished
wind power
installed capacity: 418 MWcapacity under construction: 120 MW
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Mühleberg nuclear power plant (KKM)
Ensure efficient decommissioning of KKM
Good production volume achieved in 2015 (2.9 TWh)
Decommissioning application submitted
Last day of operation determined: December 20, 2019
CHF 800m decommissioning cost CHF 861m* CHF 380m.
CHF 1,300m disposal cost CHF 725m CHF 550m
CHF 2,100m estimated total cost CHF 1,586m CHF 930m
Provisions end-2015Cost estimation excl. inflation State funds end-2015
Financing framework for decommissioning and disposal
* Whereof CHF 350m for post-operation phase and CHF 90m for plant-specific costs have not to be covered by state funds
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Increasing complexity
- Decentralized production- Volatility- Open markets
Development of smart and flexible networks offerbusiness oportunities
Investing in
- Preserving value- Preserving income- New technologies
Develop Grid
Planned investments until 2024: CHF 1 bn
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We develop integrated energy solutions and offer services from a single source
Buildup Services
- The energy system is becoming increasingly complex
- Mastering complexity offers new business opportunities
- Services are needed to master complexity
Digital management
of decentralisedproduction
Building technology
Engineering Complexnetworks
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Engineering: Center of competence strategy
- Build strong infrastructure engineering network in Western Europe
- Comprehensive engineering solutions:
- infrastructure significant renovation andmaintenance need
- power plants large inhouse expertise
- security and environment large inhouse expertise
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Complex networks: Multi-utility services
Complex networks require extensive maintenance
Grid
Telecommunications
Water supply
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Building technologies: Geographical expansionand covering of entire value chain
Planning, consulting Facility ManagementInstallation
servicecluster
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Buildings as an integral part of the energy supply system
Modern buildings are power plants
Rising technological complexity
Intelligent deployment of smart technologies
BKW Home Energy: Support customers in achieving desire for economic and safe self-sufficiency in electricity
consulting planning installation service
BKW provides comprehensive energetic solutions
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Digital management of decentralized production
Market leader small PV in Europe
250,000 customers
Trend to decentralized, partial self-sufficient, private production
Optimization of self-consumption
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Investments in CHF between now and 2024
Strategic investment plan
New investments in renewable energy
approx. CHF 1 bn
Expansion of the service business
approx. CHF 1 bn
Maintaining infrastructure
approx. CHF 2 bn(1 billion in networks)
approx. CHF 4 bn
BKW is able to finane it is strategy with on board cash and sustainable cash flows
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BKW strategy in a nutshell
• Secure sustainable cash flow generation
• Compensate falling profits from traditional power generation
• Reduce dependeny form energy prices
• Enable BKW to profit from changing "energy-system"
«We are shaping the future of energy – straightforward, reliable and integrated»
2024
www.bkw.ch
Thank you for your attention.
«We are shaping the future of energy – straightforward, reliable and integrated»
Backup:
2015 Annual Results –Presentation slides "Financials FY 2015"
Analyst conference, Zürich - 17 March 2016
| BKW |
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17.03.20162015 ANNUAL RESULTS
Income statement
CHF m 2014 2015 change in %
Net sales 2,733 2,534
Other income 112 111
Operating revenue 2,845 2,645 -7%
Energy procurement/transport -1,545 -1,266
Operating costs -772 -849
EBITDA 528 530 0.4%
Depreciation, amortisation and impairment -218 -214
Income from associates 36 66
EBIT 346 382 10%
Financial result -13 -107
Income taxes -42 9
Net profit 292 284 -3%
32
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17.03.20162015 ANNUAL RESULTS
430
320
Operating revenue per business area
Fast growing services partly compensates revenue reduction in energy
2014 2015 2014 2015 2014 2015
Energy Grid Services
CHF m
1,957
+34%
-20%
+12%
1,564
683
762
33
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17.03.20162015 ANNUAL RESULTS
Operating costs: Consistent cost management pays off
Further significant cost optimization in traditional business areas
401
470
CHF m
448 +33%
-5%
2015
34
302
Energy and Grid Services
2014 20152014
CHF m
| BKW |
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17.03.20162015 ANNUAL RESULTS
Net profit almost at CHF 300m
Net profit 2014 reported
Net profit2015 ajusted
One-off effects in
EBIT
Reported net profit on PY level in spite of weak state fund performance
One-off effect tax
Net profit 2015reported
One-off effects
Net profit2014 ajusted
EBIT-impact
+73
292
CHF m
284
-3%
184
+27-70
222 -38-17%
35
| BKW |
Strong liquidity
Investments financed through own cash generation
CHF m
17.03.20162015 ANNUAL RESULTS 36
| BKW |
–
17.03.20162015 ANNUAL RESULTS
Further improvement of already sound financial situation
Net debt reduced by 38%
797
1,2641,394
-1,590-1,734 -1,686
-793
-470-292
-2000
-1500
-1000
-500
0
500
1000
15002013 2014 2015CHF m
Cash & equivalents & current financial assets
Financial debt
Net financial debt
37
| BKW |
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17.03.20162015 ANNUAL RESULTS
0
200
400
600
800
1000
1200
1400
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Maturity profile of financing
Long-term financing framework ensures financial flexibility
CHF m
Convertible bond
Bonds
Registered bonds
Liquidity as of December 31, 2015
38
| BKW |
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17.03.20162015 ANNUAL RESULTS
Sound balance sheet
2014 2015
5,4 2,3
2,5
5,7
5,4
2,6
2,4
5,5
CHF bn32.2%
31.8%
8,07,9
%
Non-current assets
Current assets
EquityLiabilitiesEquity ratio
Equity ratio at 32%
39
| BKW |
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17.03.20162015 ANNUAL RESULTS
Reliable dividend policy
Proposed dividend on PY level
0.00
0.40
0.80
1.20
1.60
2.00
2011 2012 2013 2014 2015
CHF
Payout ratio*
* based on net profit after exceptional effects
40% 35% 40% 40% 46%
proposed dividend
40
| BKW |
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17.03.20162015 ANNUAL RESULTS
262
223
Energy
2014 2015 2014 2015
Operating revenue Operating profit
CHF m
+18%
-20%
486
1,957
1,564
– Reduced revenues due to low prices and strong Swiss Franc -CHF 400m
– Significantly compensated by – management of energy position – consistent cost management
– Volumes– sales Switzerland lower due to
weather conditions– higher thermal and hydro
production
– One-off effects– FX-effect on provisions: +CHF 45m– compensation W'haven: +CHF 28m
Successful Management of energy position and operating costs reduce negative price and FX effects
41
| BKW |
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17.03.20162015 ANNUAL RESULTS
132135
Grid
CHF m
-3%
+12%
– Operating revenue higher 12%:– passed on third-party costs
(levies and charges)– slightly higher volumes
– No EBIT-impact
683
762
2014 2015 2014 2015
Operating revenue Operating profit
Once more grid delivers a stable contribution to operating profit
42
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17.03.20162015 ANNUAL RESULTS
1711
Services
CHF m
+34%
+53%
430
320– Operating revenue: +34%
– Overproportional EBIT growth: +53%
– 20 acquisitions since June 2014
2014 2015 2014 2015
Operating revenue Operating profit
Expansion on track with overpropotional EBIT development
43
| BKW |
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17.03.20162015 ANNUAL RESULTS
Generation in GWh44
Generation and purchases in GWh 2014 2015
Hydroelectric plants 3,843 3,983
Nuclear power plants incl. purchase contracts 6,080 5,875
Fossil-thermal power plants 468 1,107
New renewable energy incl. fin. investments 858 865
Total generation 11,249 11'830
Trade (purchases) and energy buy-backs 9,762 9,145
Total 21,011 20,975
Total capacity MW 3,046 3,318
41%59%
Capacity 2015
Peak load
Base load
25%
75%
Output 2015
Peak load
Base load
Peak load: storage, pump storage plants and CCGT TamareteBase load: run-of-river, nuclear, other plants
| BKW |
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17.03.20162015 ANNUAL RESULTS
BKW Group – Generation overview45
Switzerland(Core market)
Generation 2015 (incl. French purchase contracts)
9.9 TWh
Installed production 31.12.2015
2’356 MW
Installed production under construction
15 MW
Germany
Generation 2015 0.4 TWh
Installed production 31.12.2015
382 MW
Italy
Generation 2015 1.5 TWh
Installed production 31.12.2015
561 MW
France
Generation 2015 0.1 TWh
Installed production 31.12.2015
19 MW
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17.03.20162015 ANNUAL RESULTS
Sales in GWh46
Sales in GWh 2014 2015
Sales Switzerland 6,784 6,684
Sales International 1,687 2,148
Trading 12,099 11,703
Pump energy 248 249
Transmission losses and own consumption
193 191
Total 21,011 20,975
– Delivering electricity directly and
indirectly via its distribution partners to more than 1 million
residents in Switzerland
– Strong market position – one of the most important
distributors in Switzerland
– Sales international refer to sales activities in Italy
| BKW |
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17.03.20162015 ANNUAL RESULTS
Disclaimer47
This presentation contains forward-looking statements which are made on the basis of current expectations and
assumptions. These forward-looking statements involve certain risks and uncertainties that could cause actual results
to differ materially from those contained in the forward-looking statements. Potential risks and uncertainties include,
among others, such factors as market and economic conditions, governmental regulations, competitive conditions,
interest rates and fluctuation in currency exchange rates. Although BKW believes that its expectations reflected in any
such forward-looking statement are based upon reasonable assumptions, it can give no assurance that those
expectations will be achieved. BKW undertakes no obligation to update any forward-looking statements, whether as a
result of new information, future events or otherwise.