The BKW Group - bkw-portal-static.s3.amazonaws.com · CHF 2,100m estimated total cost CHF 1,586m CHF 930m Cost estimation excl. inflation Provisions end-2015 State funds end-2015

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


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


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


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%


Operating revenue and EBIT per business area


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


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


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


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


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


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"


Business areas


strengthening developing expanding


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


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


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


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


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


Complex networks: Multi-utility services

Complex networks require extensive maintenance

Grid

Telecommunications

Water supply


Building technologies: Geographical expansionand covering of entire value chain

Planning, consulting Facility ManagementInstallation

servicecluster


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


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


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


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 |

–

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

| BKW |

–


430

320

Operating revenue per business area

Fast growing services partly compensates revenue reduction in energy

2014 2015 2014 2015 2014 2015


CHF m

1,957

+34%

-20%

+12%

1,564

683

762

33

| BKW |

–


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 |

–


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 |

–


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 |

–


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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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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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 |

–


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 |

–


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


Once more grid delivers a stable contribution to operating profit

42

| BKW |

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1711

Services

CHF m

+34%

+53%

430

320– Operating revenue: +34%

– Overproportional EBIT growth: +53%

– 20 acquisitions since June 2014

2014 2015 2014 2015


Expansion on track with overpropotional EBIT development

43

| BKW |

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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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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


382 MW

Italy



561 MW

France



19 MW

| BKW |

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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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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.

Documents

The BKW Group - bkw-portal-static.s3.amazonaws.com · CHF 2,100m estimated total cost CHF 1,586m CHF 930m Cost estimation excl. inflation Provisions end-2015 State funds end-2015