Rwe Ag Ord S/Adr

Welcome to the RWE conference call. Markus Krabba, CEO of RWE AG, and Michael Muller, CFO of RWE AG, will inform you about the developments in the fiscal year 2023. I will now hand you over to Thomas Denny. Please go ahead, sir.

Thank you, Sergey. Good afternoon, ladies and gentlemen. Thank you for joining RWE's conference call on full year 2023. As always, our CEO Markus Krever and our CFO Michael Müller will guide you throughout the rotation, after which we'll start our Q&A session. And with this, I'll hand over to you, Markus.

Yeah, thank you, Thomas, and also from my side, a warm welcome to everyone. 2023 was a remarkable year. We have delivered a strong operating performance. We have significantly exceeded our financial targets. We have added 6.3 gigawatt of green capacity to our portfolio. And we have cut CO2 emissions by a remarkable 27%. Since December 23, commodity prices have come down by around 30%, but we can keep our 2024 guidance, which we outlined in our CMD last year. We now expect to be at the lower end of our guidance range, which is about 5% below midpoint and translates into 2.6 euros earnings per share. We have a high share of secure revenues in our wind and solar business and consequently only limited power price exposure. And our flexible generation business benefits from an increasing share of secured long-term revenues. Overall, we do see a faster normalization of power prices. Our long-term expectations have not changed. We remain committed to our mid and long-term EPS targets for 27 and 2030 as outlined at our CMD. Let me be clear, our focus is on bottom line earnings per share. Therefore, profitability of our investments is key. And in light of an evolving risk-reward environment, we do constantly reassess our capital allocation. But please do not expect us to change course on an ad hoc basis because of short-term developments. We have made significant progress in expanding our green portfolio. In 23, we even increased our investments and we closed the acquisition of ConElsin clean energy businesses. The investments contributed to a strong earnings growth in 23. Adjusted EVTA was up 33% year-on-year. And our green transformation continues to drive a significant reduction in CO2 emissions. Year on year, they are down 27%. Also long-term, we have committed to a more ambitious CO2 reduction target in line with the 1.5 degree emission reduction pathway. The next milestone on our decarbonization path is the closure of 2.1 gigawatt lignite capacity by the end of March and a further 0.3 gigawatt by the end of this year. Since December last year, we have seen a significant decline in European gas and carbon prices. This has led to power prices dropping by around 30%. Thanks to the robustness of our earnings mix, we keep our full year guidance for 24, but we expect to be at the lower end of the range. For adjusted EBITDA, we now expect around 5.2 billion, and for adjusted net income, 1.9 billion euros. This translates into 2.6 euros earnings per share. In our wind and solar business, we have limited market price exposure. Our strategy is to lock in secured revenues in wind and solar long-term through CFDs, feed-in tariffs, PPAs, and tax credits. And we actively manage our remaining price-exposed volumes by applying hedge strategies. Diversification across various regions further reduces volatility. Page 7 of the presentation provides full transparency about the price-exposed positions, generation margin, sensitivities. Let's move on to the flexible generation business. Here, our long-term market expectations have not changed. We see long-term earnings growth and we see an increasing share of secured revenues reflecting the nature of the business, providing firm capacity and firm flexibility. For example, in Germany, we secured attractive margins in a tender for capacity reserve until 2026. In the UK, The recent T-4 capacity market auction has secured revenues of more than 400 million pounds for the 27-28 period. Our mid- and long-term targets for 27 and 2030 for flexible generation remain unchanged. What has changed is the faster-than-expected normalization of power prices in Europe. From 2024 until 2026, we now expect an average adjusted EBITDA of 1.4 billion euros. Our investments in 2023 have almost fully secured long-term contracted revenues in line with our investment strategy. Only less than 5% of the wind and solar capacity additions in 2023 have price exposure. More than 95% have long-term contracted income streams. Our strategy will lead to an increasing share of contracted revenue for the entire portfolio. Also, all wind and solar projects under construction will have a high share of contracted revenues. For all our offshore projects without CFD government offtake, we are targeting secure revenues via PPAs before commissioning. This is also true for our Danish offshore project TOR, similar to what we have done at our Cascadia offshore wind farm in Germany, where the full capacity has been sold via PPAs at attractive long-term prices. Our investments will lead to attractive long-term earnings growth, and the quality of our earnings will improve continuously. The share of secured revenues will increase further from our renewable investments, as well as the earnings mix in flexible generation. And the portfolio will decarbonize in line with the 1.5-degree pathway. Despite the faster normalization of the commodity price environment, our long-term expectations have not changed. In light of an evolving risk-reward environment, we do constantly assess our capital allocation. With a clear focus on EPS growth, we do confirm our earnings per share targets for 27 and 2030. And now, over to you, Michael.