bkw well-positioned in attractive markets
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BKW well-positioned in attractive marketsBAADER HELVEA SWISS EQUITIES CONFERENCE, 10 JANUARY 2019RONALD TRÄCHSEL, CFO BKW
Operating revenue CHF 2.6bn
EBIT CHF 0.4bn
Operating cash flow CHF 0.5bn
Liquidity CHF 1.2bn
Net debt CHF 0.4bn
Employees 7,800 FTE*
52.5%
10.0%
37.5%
Canton of Berne
Groupe E
Free float
Shareholder structure
Facts & Figures 2017
* end-2018
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Growth in Switzerland and in international markets
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CompaniesGeneration facilities
Companies
Generation facilities
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BKW business areas
Energy Grid Services
Generation (capacity: ~3'700 MW),trading, sales
Revenue: CHF 1,260mEBIT: CHF 158mEmployees: 1,000 FTE
Distribution grid: ~22'000km
Revenue: CHF 670mEBIT: CHF 211mEmployees: 800 FTE
Services around infrastructure
Revenue: CHF 740mEBIT: CHF 46mEmployees: ~6,000 FTE
Baader Helvea – Swiss Equity Conference 10.01.2019
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324 317347
309346
379
0
100
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500
2011 2012 2013 2014 2015 2016 2017
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Negative electricity price effect on revenue: ~CHF 700m since 2014
EBIT history (comparable)
CHF m
60 EUR/MWh
30 EUR/MWh
Market priceof electricity240 150140
- CHF 670m
price effect on operating revenue
140
Baader Helvea – Swiss Equity Conference 10.01.2019
Strategy
BKW competencies meet changing social needs and priorities
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Remodelling of energyinfrastructure
More efficient buildingsand infrastructures
High investment need in infrastructure in Europe
Significant position and operational know-howin wind and flexible hydro power
Strong track record in management of energypositions (exploiting short-term marketfluctuations)
Extensive, efficient power grid
Relevant offering of comprehensive, tailoredsolutions for efficient buildings
Strong competencies in engineering and in grid infrastructure services
Climate change
Urbanisation
Digitalisation
Megatrends lead to growing needs for BKW expertise in attractive and growing markets
Baader Helvea – Swiss Equity Conference 10.01.2019
Remodelling of energy infrastructure (I):Buildup of renewable energies
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400
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600
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800
2011 2012 2013 2014 2015 2016 2017 2018 2019
Installed capacity in MW Wind and small hydroStrategically diversified wind power portfolio
MW GWh/year
Wind farm portfolio
Operational 482 800
Under construction 174 590
Small hydro portfolio
Operational 89 270
Projects 15 56
Baader Helvea – Swiss Equity Conference 10.01.2019
Remodelling of energy infrastructure (II): Advantageous flexible hydro power capacity
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- Storage and pump-storage plants in Switzerland
- Competitive edge with high share of own flexible power plants:
- Advantageous geographical location
- High flexibility
- Competitive prices
42%
Baader Helvea – Swiss Equity Conference 10.01.2019
Total installed capacity: 3'500 MW
Flexible Base load
40%
Hours per year with price extremes
t
Remodelling of energy infrastructure (III): Trading well positioned to exploit opportunities in volatile markets
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Management of ownenergy positions
Managing and trading forthird-parties
High competence in short-term trading
Volatile energy markets require comprehensive expertise
Optimized and efficient integrationof renewable energies in the energymarket
Baader Helvea – Swiss Equity Conference 10.01.2019
Remodelling of energy infrastructure (IV): Grid business adds stability to performance
Increase efficiency, implement "smart grid" to copewith new requierements of the market:
Full Market Liberisation
Decentralized production
Smart Meters
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Key figures Grid business
Owner of largest distribution grid in Switzerland ~22'000 km
Regulatory Asset Base CHF 1.7bn
WACC / ROCE regulated 3.8%
Investments per year CHF 120m
Largest shareholder of Swissgrid (transmission grid) 36.4%
Baader Helvea – Swiss Equity Conference 10.01.2019
Efficient buildings and infrastructures: Powerful, locally anchored Building Solutions network
Buildings consume 50% of the energy – clients desire integratedsolutions that ensure energy efficiency and comfort
Successfull build-up of nationwide network withcomprehensive, integrated solutions
Synergies in market offerings, procurementand administration
EastCentralWest
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300
2013 2014 2015 2016 2017 2018
CHF m operating revenue
CAGR 33.7%
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Building Solutions
2018
7 acquisitions
Regional clusters strengthened
Collaboration intensified
Baader Helvea – Swiss Equity Conference 10.01.2019
High investment needs in infrastructure (I): Infra Services meet growing demand for complex grid infrastructures
East
Energy
West
Arnold
Water
Central
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100
200
300
2013 2014 2015 2016 2017 2018
CHF m operating revenue
CAGR 8.0%
13
2018
Network internally strengthened
Further buildup of combinedservices
Baader Helvea – Swiss Equity Conference 10.01.2019
Extensive and widespread networks need considerable maintenance
Largely identical customer base for multi-grid infrastructureservices: clients desire offerings from a single source
National presence with efficient, regional organisational structure (market leader power grid)
High investment needs in infrastructure (II): BKW well-positioned with expertise of 2,400 engineers
Clients need locally anchored providers with full set ofcompetences
BKW network combines larger companies with wide-ranging expertise and smaller local companies with specialisedcompetencies
Close exchange within the network with the aim of becoming "best-of-class"
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50
100
150
200
2013 2014 2015 2016 2017 2018
CHF m operating revenue
CAGR 48.6%
14
2018
12 acquisitions
Network significantly expanded
Baader Helvea – Swiss Equity Conference 10.01.2019
Balanced positioning with strong upside potential
Adjustment to changingmarkets
Potential for high added value
High capital intensity
Stable and robust business
Regulated income
High capital intensity
Energy(1,000 employees)
Grid(800 employees)
Services(~6,000 employees)
Attractive growth business
Good margins
Low capital intensity
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Strategy with aim of sustainable growth
Revenue
EBIT
Energy Grid Services
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Strong business model geared towards sustainable growth
Strategy execution: investments in growth, financed by own funds
Investments financed byown cash flow generation
Significant investment program – growth in services and renewable energies
Maintenance / replacement
Growth
486
410
486 465
0
100
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600
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
CHF m
Funds from operationsCHF 2.5bn until 2024
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Share price and dividends
1.00
1.20 1.20
1.60 1.60 1.60
1.80
20%
30%
40%
50%
60%
70%
80%
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
2.20
2.40
1 2 3 4 5 6 7
Performance 2018 >110% since 2014 Daily trading volumes over CHF 2m since 2017
CHF Dividend per share Pay out ratio
Increased dividends reflect successful transformation
Target zone pay out ratioPay out ratio
2011 2012 2013 2014 2015 2016 2017
0
5'000
10'000
15'000
20'000
25'000
30'000
35'000
40'000
45'000
50'000
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75
CHF Volume in pcs.
BKW
SPI
Daily trading volume SIX
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Disclaimer
This presentation contains forward-looking statements which are made on the basis of current expectations and assumptions. Theseforward-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 andeconomic 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.
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