Investor presentation, September 5th 2017€¦ · · 2018-02-09Net profit from continuing...

Investor presentation, September 5th 2017

| BKW |

HY 2017: consecutive strong results

Operating revenue increased by 9%

Consecutive strong results achieved: Operating profit +6%

BKW once again able to overcompensate negative electricity price effects

Continued rapid growth of services: Revenue +37%, EBIT +40%

171

HY 2016 HY 2017 HY 2016 HY 2017

Operating revenue Operating profit

CHF m +9%

+6%

182

1,190

1,298

CHF m

05.09.20172017 HALF-YEAR RESULTS 2

Financials HY 2017

| BKW |

Income statement


CHF m HY 2016 HY 2017 change in %

Operating revenue 1,190 1,298 +9%

Energy procurement/transport -473 -515

Operating costs -454 -527

EBITDA 263 256 -3%

Depreciation, amortization and impairment -91 -96

Income from associates -1 22

EBIT 171 182 +6%

Financial result -18 -20

Income taxes -29 -44

Net profit from continuing operations 124 118 -5%

Net profit from discontinued operations 0 -2

Net profit 124 116 -6%

| BKW |

Operating EBIT +6%05.09.20172017 HALF-YEAR RESULTS 5

Successful operating performance in all business areas

HY 2016 Energy Grid Services other HY 2017

CHF m

+6%14

4

182

-8

171

1

| BKW |

Half-year EBIT history (comparable)


Consecutive EBIT-increase despite adverse business environment

142156

141 141 138

171182

0

100

200

HY 2011 HY 2012 HY 2013 HY 2014 HY 2015 HY 2016 HY 2017

CHF m

60 EUR/MWh

30 EUR/MWh

Market priceof electricity

| BKW |

EBIT development / price effect on operating revenue


Negative price effect of CHF 600m since 2014

239

324 317347

309

346

182

0

100

200

300

400

500

2011 2012 2013 2014 2015 2016 HY 2017

CHF m

60 EUR/MWh

30 EUR/MWh

Market priceof electricity240 150140

- CHF 600m

price effect on operating revenue

70

182

| BKW |

Operating cost reduction in organic business


Continuous and consistent cost management in organic business

846

-41

820 953

+114

HY 2016 cost reduction HY 2017organic

acquisitions HY 2017 reported

413

454

527

CHF m

| BKW |

Investments to support strategy

905.09.20172017 HALF-YEAR RESULTS

Investments

63% in growth CHF 143m

thereof

- Services CHF 114m

- Energy (wind & small hydro) CHF 29m

37% in maintenance/replacement CHF 85m thereof

- Grid CHF 64m

- Energy CHF 10m

- Other CHF 11m

CHF 228m

Energy

Services

Grid

EnergyOther

Around 2/3 of investments in growth - in line with strategy and long-term capex plan

Partner plants CHF 30m

| BKW |

Funds from operations at CHF 223m


Consecutive strong cash inflows: record high over five-year period

175 181

215

191

223

0

100

200

HY 2013 HY 2014 HY 2015 HY 2016 HY 2017

CHF m

| BKW |

Liquidity at CHF 1.2bn 05.09.20172017 HALF-YEAR RESULTS 11

Liquidity at strong CHF 1,2bn despite significant investment activities

CHF m

1248 1181

+217+12-191

-87-18

Operatingactivities

Investing activities Financing activities

| BKW | 05.09.20172017 HALF-YEAR RESULTS 12

1,3941,248 1,181

-1,686 -1,687-1,602

-292-439 -421

-2000

-1500

-1000

-500

0

500

1000

1500

FY 2015 FY 2016 HY 2017CHF m

Cash & equivalents & current financialassets

Financial debt

Net financial debt

Sound financial situation: net debt reduced

Net debt level further reduced as a result of strong operating cash flow

| BKW |

Maturity profile of financing05.09.20172017 HALF-YEAR RESULTS 13

Long-term financing framework ensures financial flexibility

Convertible bond

Bonds

Registered bonds

CHF bn2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

1.4

1.2

1.0

0.8

0.6

0.4

0.2

0.0

CHF 150m

CHF 350m

CHF 36m

CHF 200m

EUR 40m

CHF 300m

EUR 85m

EUR 150m

| BKW |

Sound balance sheet: equity ratio at 35.9%


FY 2016 HY 2017

5,6

3,0

2,4

6,2

CHF bn34.3%

8,6

Non-current assets

Current assets

EquityLiabilitiesEquity ratio

Increased equity ratio as a result of strong net profit and conversion of treasury shares

2,3

6,4

5,6

3,1

35.9%

8,7

| BKW |

Share price development and shareholder structure


Performance HY 2017: +14%, free float at 37.5% (incl. convertible bond BKW)

52.5%

10.0%

1.8%

35.7%

Canton of Berne

Groupe E Ltd.

Treasury shares (convertible bond)

Free float

37.5%

CHF

BKW

SPI

+48% Free float

30

33

36

39

42

45

48

51

54

57

60

31.12.2015 31.03.2016 30.06.2016 30.09.2016 31.12.2016 31.03.2017 30.06.2017

| BKW |

Convertible bond


Significant conversions: 79%

0

2000

4000

6000

8000

10000

12000

14000

100

110

120

130

140

150

160

04.01.2016 27.05.2016 17.10.2016 07.03.2017

BKW convertible bond (2020)

Principal amount CHF 163.4m

Underlying number of shares 4'199'964

Issue price 100

Conversion price 37.81 CHF

Conversions so far (nom.) 127.0 MCHF

Converted shares so far 3,344,921 79%

Treasury shares stake July 2017 1.8%

CHF CHF t

BKW convertible bondConversions

| BKW |

Operating revenue and EBIT per business area05.09.20172017 HALF-YEAR RESULTS 17

All business areas with higher EBIT

HY16 HY17 HY16 HY17 HY16 HY17 HY16 HY17 HY16 HY17 HY16 HY17

Energy Grid Services

CHF m

692

+37%

-4%

+16%666

8180

11197

15

Operating revenueOperating profit

11

+1%

+14%

+40%

296

343

242

332

| BKW |

Energy: full compensation of negative price effects


HY 2016 HY 2017 HY 2016 HY 2017


CHF m

-4%

666

– Negative price effect on revenue: ~CHF -70m

– Offset on EBIT-level by

Management of energy position (trading)

Further reduction of operating costs

Acquisition of AEK and development of power plants (wind, small hydro)

Negative price effects fully compensated on EBIT level

8180

+1%

692

| BKW |

Grid: EBIT-contribution further increased


11197

CHF m

+14%

+16%

– Revenue higher:

- Acquisition of AEK

- Compensation payment in relationto transfer of transmission grid

– Operating profit higher:

- Acquisition of AEK

- Reduction of operating costs

- Increased Swissgrid stake

– PY: One-time revaluation gain of CHF 11m relating to AEK acquisition

EBIT-contribution increased in line with expectations

HY 2016 HY 2017 HY 2016 HY 2017


342

296

| BKW |

Services: growth leads to strong EBIT-increase


15

CHF m

+37% – Strong growth of revenue, up by 37%

– 10 acquisitions in HY 2017

– Stable EBIT-margin despite high acquisition activities

– Due to seasonality, stronger development in 2nd HY expected

Expansion on track: strong growth

11

+40%

HY 2016 HY 2017 HY 2016 HY 2017


332

242

Outlook and strategy update

| BKW |

Outlook FY 2017 confirmed

BKW expects FY17 comparable operating profit to be on FY16 levels

– profitable growth of services business

– active management of energy position

– consistent cost management


| BKW |

2012 2013 2014 2015 2016 2017

Market environment


Classical energy business under heavy pressure – BKW responds with its forward strategy

Market priceof electricity

60 EUR/MWh

30 EUR/MWh

International factors:

- Subsidies for renewable energies

- Low commodity and CO2 prices

- Economic policy

| BKW |

Shaping the future of energy – straightforward, reliable and integrated


A robust business model: growth, risk diversification and sustainability

Existing competencies as platform for growth- Grow services- Grow regulated income

Keep recovery potential in energy

| BKW |

BKW pursues its strategy consequently – despite localcontroversies


BKW strategy not influenced by local controversies and politics

BKW is a listed company

Economic freedom is independentfrom shareholder structure

Economic freedom also applies tostate-owned and partly state-owned companies

Competition is permitted, commonand also welcome!

| BKW |

Infrastructure services: a natural evolution05.09.20172017 HALF-YEAR RESULTS 26

BKW delivers integrated solutions for customers

Engineering & constrution ofproduction facilities

Engineering & construction ofgrid infrastructure

Engineering & installation ofinfrastructures

| BKW |

Services: business rationale 05.09.20172017 HALF-YEAR RESULTS 27

Core of BKW's services strategy: growth in adjacent fields

Building technologies

Engineering

Grid infrastructure

Experienced in power plant engineering

Strong track record in electricity grid infrastructure

Proven competence in electro installation

Industry-, infrastructure- andenvironment-planning andconsulting services

Multi-utility infrastructureservices: electricity, telecom, transportation, water

Comprehensive technicalservices for buildings

| BKW |

~50%almost half of all energy in Switzerland

is consumed in buildings

Significant market


Building technologies: buildings are in the center of an intelligent, integrated energy supply system

Synergies and new market opportunities result from increasing complexity of new technologies

Effizienzsteigerung

BKW providesintegrated services

| BKW |

Building technologies: regional structure05.09.20172017 HALF-YEAR RESULTS 29

Regional structure combines wide range of services

Implemented backbone formanagement and supportprocesses ensuresefficiency

Strong local focus

Powerful company network: regional and nationwide

EastCentralWest

BKW building technologies

| BKW |

Grid infrastructure: specified multi-utility services05.09.20172017 HALF-YEAR RESULTS 30

east

electricity, telecom, transportation

west

Arnold

water

Arnold AG: backbone withstrong track record

Nationwide presence: efficient regional organization

Water infrastructure: acquisitions lead to broadexpansion of services

central

Multi-utility services lead by Arnold Group

| BKW |

Engineering: acquired Groups as basis for further growth05.09.20172017 HALF-YEAR RESULTS 31

Combined know-how in energy, infrastructure, environment and survey

Current managementprocess via large Group companies

Target structure beingimplemented: backbonewith strong network in D-A-CH region

Optimization of knowledgeand utilization

| BKW |

Services business areas: what we do05.09.20172017 HALF-YEAR RESULTS 32

planning & consulting

installation

maintenance

decommissioning

Building technologiesEngineering Grid infrastructure

HVAC, electroinstallations

infrastructure, electricity and environment

electricity, transport, telecom, water

Services for infrastructure life-cycle!

| BKW |

1. Services cover whole life-cycle of infrastructure

2. Integrated solutions for changing customer needs

3. Development of further expertise based on traditional competencies

Services business strategy05.09.20172017 HALF-YEAR RESULTS 33

BKW delivers integrated solutions for customers

Building technologiesEngineering Grid infrastructure

| BKW |

BKW strategy shaped to create value05.09.20172017 HALF-YEAR RESULTS 34

BKW business model geared toward growth: robust, profitable and sustainable

Existing competencies as platform for growth- Grow services- Grow regulated income

Keep recovery potential in energy

Questions?

| BKW |

Financial calendar and contact information

Financial calendar

– Publication of 2017 Annual Results: 20 March 2018

– Annual General Meeting: 18 May 2018

– Ex-dividend Date: 23 May 2018

– Dividend Payment: 25 May 2018

For further information, please contact:

Thomas Herren, Investor Relations Officer

Tel (+41) 58 477 53 56

[email protected]


| BKW |

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.


Investor presentation, September 5th 2017€¦ · · 2018-02-09Net profit from continuing...

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