Uniper Se

Dear ladies and gentlemen, welcome to the Uniper Analyst and Investor Conference Call for Year Results 2023. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions by dialing star 11 on your telephone. May I now hand you over to Stefan Joost, who will start the meeting today. Please go ahead.

Thank you, operator, and good morning, everyone. I'm pleased to welcome you to our full year 2023 results. Next to me on today's call are Michael Luth, our Chief Executive Officer, and Jutta Dunges, our Chief Financial Officer. Mike will start and lead you through our key developments in the past financial year 2023. Jutta will then present the financials for 2023 in more detail and provide an outlook for the year 2024. As usual, there will be a Q&A session at the end. And now, let me hand over to Michael Lewis, please.

Thanks, Stefan, and good morning, everyone. A warm welcome from my side. Before we go through the presentation, let me spend a few words on Uniper's turbulent development over the past couple of years. As you know, I started my work as CEO of Uniper on 1 June 2023, and I'm very proud that we managed to complete a turnaround in 2023 compared to 2022, when Uniper was on the brink of insolvency after the burden of the Russian gas curtailments. Of course, in December 22, there was no option left for the German federal government other than to bail out Uniper with significant equity injections. It proved to be the right decision for the gas markets and indeed for Germany's security of supply. And for Uniper, it was the starting point for a remarkable comeback. And just three months later, Uniper was back in profit and delivered a positive adjusted EBIT. And in the whole period over 2022 and 2023, we managed to secure the gas and also power supply for our customers and partners in every phase of the market development, always honoring our contractual commitments 24-7. And beyond that, in 2023, we did the groundwork for defining and releasing our new strategy in August with a clear pathway to transform Uniper into a greener company over the next seven years. And since then, we've made decisive action to execute our ambitious program with the first successful steps. So let me turn now to slide three and the highlights of Uniper's 2023 fiscal year. And our progress in 23 is well summarized in four dimensions. First, our financial performance, which boosted our financial recovery. Second, all topics related to the EU stabilisation package and we've made excellent progress in all of those. Third, our new strategy has set the course for UNIPA towards 2030 and beyond. And fourth, we've started to execute our green transition with several key projects. In summer 2023, I said UNIPA is back and it's fair to say we kept our promise. After a turbulent time, 2023 was a great and extraordinary year for Uniper, and the financial year 2023 ended with record results which laid the basis for a strong recovery of our financial position and our balance sheet. We're also fully on track with the EU disposal obligation. In 2023, we sold our participation in the BBL pipeline, we sold our marine fuel trading business in the United Arab Emirates, and we opened the sales process for our participation in the Latvian gas company Latvia Gazza. Also, we started the sales process for our North American power business, which is already at an advanced stage. In 2024, we'll continue with our obliged disposals, and just recently we signed an agreement to sell our gas-fired power plant GONU in Hungary. We've also booked a provision for the expected level of repayment obligations towards the Federal Republic of Germany in connection with the state aid granted in 2022 and earmarked the necessary funds to cover that. This provides for the required clarity on UNIPA's financial starting position for the transformation journey. At the end of last year, we also reached an important milestone. As you know, the extraordinary general meeting on December 8th approved our capital measures to restructure our equity position. These measures and a strong operational result for 2023 allow for an offset of our accumulated balance sheet loss of around 24.2 billion euros from 2022 in our statutory German gap accounts of Uniper SE. This is one important technical prerequisite for Uniper to be able to pay dividends again in the future. And on top of that, we've started to execute our own energy transitions. In terms of security of supply in Germany and Europe, we were able to bring online the most utilized terminal in the liquefied natural gas sector in Germany in Wilhelmshaven. Let me remind you that we completed the seaborne terminal, the first in Germany, in record time with a construction period of less than 10 months. And by the end of December, we'd imported around 7 million cubic meters of liquefied natural gas. We're proud that this terminal is making a reliable contribution to security of supply in Germany, and last year it supplied around 6% of total German gas demand. In relation to renewable energies, we're also gradually expanding our portfolio to foster our green power generation. Partnerships play a key role in our growth. For example, in Hungary, we made progress together with our local partner, Calis, in developing six solar PV projects, with a capacity of around 300 megawatts, which are expected to start producing green power as of 2026. Another remarkable achievement in the flexible electricity generation to cover peak loads was reached last year. We've taken Ershing 6 in Germany into operation. This is a 300 megawatt flexible gas power plant that serves solely to stabilize the grid and is effectively an airbag for the energy system. In Sweden, We completed the conversion of two gas turbines with an installed capacity of 126 megawatt to renewable fuel, which allows for a CO2 reduction from these assets of up to 90%. So we've shown that we can deliver new green renewable projects, we can deliver new flexible generation, and we can convert existing assets into lower carbon assets. Now let's move on to slide four, which brings us to our 2023 results. As I said before, the full year 2023 ended with outstanding earnings, and we met our specified outlook from October 2023. Jutta will present the full financial details in just a few minutes, but I want to just make a few comments about what these figures mean. As you can see on slide four, we achieved an adjusted EBIT of 6.4 billion euros, thanks to one-off gains from procurement of gas replacement volumes, fossil generation, and strong optimization results. It's important to note that this is an exceptional level, which we do not expect to achieve again at this level in the future. Our adjusted net income improved from a loss of minus 7.4 billion euros to a profit of 4.4 billion euros. In light of normalizing market prices, we expect going forward lower earnings in a post-crisis environment. Moving on, let me switch to the next slide, which gives you a few examples of how our new strategy is reflected within our organization. With 2024, we entered a new phase, and our full focus will be on the execution of our strategy that we announced in August last year. Our aim is to transform Uniper into a leading provider of green energy in Europe, while at the same time continuing our role in providing security of supply for our customers and for the wider energy system. We will predominantly produce green and flexible power, blend our gas supply with a rapidly increasing share of green gases, and serve our customers with bespoke solutions for their own energy transition. And to successfully deliver on our targets, we need an appropriate steering framework in place. And as you can see on slide five, with the start of the current fiscal year 2024, We've adapted our segmentation and one of our two leading financial KPIs. This supports an effective transformation management, while at the same time making the change of the earnings composition more transparent along the way. And that means first European generation is split into two segments, namely green generation and flexible generation, which reflect the two cornerstones of our growth strategy. The green generation segment includes UNIPA's carbon-free hydro and nuclear power generation that accounts for nearly 20% of our total capacity as of today. Our aim is to further expand this share and to speed up the growth of our renewable asset base by investing into wind and solar. The flexible generation segment bundles all generation capacity that contribute to ensuring grid stability and security of supply and are therefore key components of the energy transition in UNIPA's core markets. As of today, these include our coal as well as our gas assets, and while our exit path for coal continues, thus the share of these assets in the segment will diminish according to the plan. And one main task ahead will be to transform our existing gas fleet step by step into low carbon or carbon-free flexible and dispatchable power plants. we're also prepared to invest into new net zero capable and flexible assets at gigawatt scale as well as in large scale battery solutions the right regulatory framework conditions will unlock a huge potential for uniper to grow and the progress in the so-called cafe strategy in germany is an important step which needs now to be quickly detailed and put into action second will change the name of the global commodity segment into greener commodities to reflect the ongoing transformation there. With our midstream gas business, Unipa remains a reliable gas supplier with our municipal and industrial customers, and will continue to de-risk our gas business model and further diversify the supply of gas. Furthermore, We're also aiming to increase the proportion of green gases in our portfolio in line with market developments. And we'll ramp up hydrogen activities to become a significant producer of carbon-free hydrogen in the future and explore the potential to convert parts of our gas storage portfolio into hydrogen storage. And in the segment greener commodities, we will also bundle our growing PPA activities where we made a significant progress in 2023 for instance, with a 15-year PPA with industrial partners in Sweden. We've added in our appendix a slide comparing the breakdown of the old and new figures per segment and subsegment so that you can see exactly how that translates. Reflecting our switch in gear for our transformation, we've also realigned our financial steering towards investment mode by choosing adjusted EBITDA instead of adjusted EBIT as our leading KPI. Jutta will give an outlook for 2024 based on adjusted EBITDA figures for the first time at the end of this presentation. Let me now guide you through our priorities for 2024 on the next slide. 2024 is the first full year of the new Uniper focusing on the execution of our strategy. And to set the course for the future, we've outlined our strategic roadmap. First, we work every day to keep the existing business running smoothly and maximize its financial value in order to have the funds for future investment and growth while maintaining our key role in security of supply. We're also actively reducing our risks by improving our optimization strategy and hedging strategies in a volatile and challenging market environment going forward. and the recent sharp decline in commodity prices is one example for the challenges we're facing. For this reason, it's even more important to implement our strategy with full force in addition to running our existing business in order to expand our non-merchant cash flow streams in particular. By the same token, we'll execute on our commitments towards becoming a carbon neutral company. Here are coal-fired power plants in Ratcliffe in the UK and Haydn in Germany, which delivered over decades a reliable source of energy and contributed significantly to Uniper's past success, will finally cease operations in the autumn of 2024. Second, we need to develop our future asset base. As many projects have a long lead time, it's vital to make the right investment decisions at the right time. We do have a strong project portfolio, but we need to exercise the right options and focus on the right projects that will deliver early returns and ensure that we grow the business over the coming years. Third, it's essential to have the right organization and the best people and processes in place to ensure timely delivery of our strategic targets. We therefore adjusted responsibilities of the management board members last year, and we're still gradually strengthening our organizational setup below the board level in order to deliver our growth plans. In addition, we're also recruiting a significant number of new colleagues to help us implement new projects and keep running a reliable and profitable business at the same time. And fourth, we're engaging with governments to help shape the regulatory framework necessary to deliver the energy transition in Europe and pave the way for the required new investments. For example, we've intensively engaged in the discussion on the German power plant strategy And we're pleased that this has moved forward and has now been announced by the German federal government. And fifth, we're making very good progress in delivering our obligations under the EU state aid ruling. And we're very confident that we'll accomplish all announced divestments by the target date, the end of 2026. And delivering our obligations is a very, very important cornerstone to restoring UNIPA's capital market viability. As you can see, we have a hugely challenging year ahead and indeed years ahead and delivering our strategy out to 2030 is a marathon and will comprise a huge amount of effort over a long period from the whole organization. But let me assure you, we at Uniper, I personally and all of my board colleagues and senior leaders are fully committed to making the new Uniper a reality. And with these words, I'd like to hand over to Jutta for a deep dive into the financial performance for 2023. Jutta, over to you.