Unternehmenskommunikation auf den EK- und FK-Märkten

Dr. Adam Strzyz Ruhr-Universität Bochum, 21 January 2020 Agenda

Uniper’s Role in the Energy World

Our Equity Story

Profit Warnings, Guidance & Communication – What is „good“ IR-work?

Importance of Rating – The case of & Uniper

2 Uniper at a Glance

Where we operate Employees: 11,000 European

Generation Gas-fired Coal-fired Hydroelectric Nuclear (SWE) ~10 GW ~7 GW ~4 GW ~1 GW

Power generation, Storage, Services - Europe Global Power generation - International

Commodity Trading, Energy Sales Commodities Gas Supply Gas Storage Regasification Energy sales ~400 TWH LTC ~80 TWH ~50 TWH p.a. ~1.000 customers

€1.5bn 100 years 34 GW International 40+ countries around the world EBITDA Experience Generation Power Gas-fired Coal-fired Among largest generators in Europe ~9 GW ~2 GW

Datteln IV #2 in coal 60mt CO2 commissioning last new coal- In terms of operated Emitted in 2018; fired power plant in capacity in Germany comparable to Finland

Power-2-Gas #1 in Hydro ~40% EBIT first company to operate a “green In terms of operated From carbon free power hydrogen” plant on industrial scale capacity in Germany generation in 2018 3 Current Projects – Impressions from the Energy Sector

Nord Stream 2 pipeline project LNG terminal Wilhelmshaven Windgas Falkenhagen

Projec  Capacity: 55bcm  Capacity: 10bcm  2 MWel / 360 m3/h H2 Alkaline electrolysis  Length: 2 X 1225km  First Regas Terminal  Invest up to 9.5 bn€ in Germany  Operating since 2013  Uniper financing  COD End 2022  H2 injection into gas partner @10% transportation pipeline  COD Mid 2020  Expanded into 1MW catalytic methanation plant (“synthetic methane”) “Germany is making a tremendous mistake „Das ist ein wichtiger, notwendiger by relying so heavily on the pipeline” Übergangsschritt im Hinblick auf eine (Donald Trump) nachhaltige Wasserstoffwirtschaft, die aber erst mittel- und langfristig erreichbar ist.“ "Es ist richtig und wichtig, dass Europa in (Peter Altmeier) „Ich arbeite dafür, dass Deutschland bei gewisser Weise die Hoheit über seine „…für einen Flüssiggasterminal ist Wasserstofftechnologien die Nummer 1 in Gasversorgung und die Diversität seiner Wilhelmshaven eindeutig der beste der Welt wird“ (Peter Altmeier) Gasversorgung behält“ (Angela Merkel) Standort.“ (Sigmar Gabriel)

4 Overview of German Lignite Exit Plan (16.01.2020)

 Uniper‘s Schkopau plant in Eastern Germany allowed to run up until 31.12.2034  Uniper’s hard Coal Plant Datteln IV is allowed to go into operations  German Government spends ~50bn€ (40bn€ structural aid, 4.8bn€ for employees, 2.6bn€ for RWE, 1.8bn€ for LEAG)

5 Emission Targets are a Key Priority for the Sector

Carbon neutrality Absolute or relative Carbon intensity carbon reduction

Achieve CO2 neutrality for the global Reduce absolute scope 1 and 2 GHG Carbon intensity target of 500g of CO2/KWh generation portfolio by 2040 (path: - emissions by 38% by 2030 from a 2017 (on average) though 2020 based on direct 33% by 2020 and -70% by 2030 compared base year and reduce absolute scope 3 CO2 emissions from fully consolidated, to 2012 levels) GHG emissions from use of sold stationary fossil-fueled power plants and products by 20% by 2030 from a 2017 power-and-heat plants and these plants’ Be carbon-neutral until 2050 by having base year power and heat output carbon-neutral buildings until 2030, an electrified fleet until 2030, reduce the Carbon intensity target of <200g CO2/kWh carbon emissions of own business Help their customers to reduce emissions from total energy production on a 5-year operations by 30% vs. 2016 and reduce by 25%, by direct (3%) and indirect average the carbon emissions of customers per action (baseline: 2015) kWh by 50% vs. 2016 Reduce scope 1 and 2 GHG emissions by Reduce absolute scope 1,2 and 3 GHG Reduce scope 1 GHG emissions by 70% 75% per TWh by 2030 from a 2015 base emissions by 20% by 2030 from a 2017 per kWh by 2030 from a 2017 base year, year and reduce scope 3 GHG emissions by base year limiting them to 125g/kWheq, and achieve 40% by 2030 from a 2015 base year full decarbonization by 2050; Reduce absolute scope 3 emissions by 40% by Reduce Scope 1 and 2 GHG emissions by 2030 from a 2015 base year 98% per kWh by 2025 from a 2006 base Reduce GHG emissions by 90% by 2021 year and reduce absolute scope 3 GHG by from a 2011 base-year (Scope 1, Scope 2, 50% by 2032 from a 2018 base year and scope 3 emissions from fuel-and- Reduce Scope 1 and 2 GHG emissions by energy related activities and business air 40% per MWh transported by 2030 from a travel); long term goal to be carbon neutral 2015 base year by 2050

6 Become a Uniper Trainee!

Take part in our Trainee Program - Explore our company and make the next step in your career!

As a Graduate in the Trainee Program, you have the opportunity to get to know different divisions and to gain valuable experience.

The semi-structured program with a combination of predefined and flexible stations also includes the opportunity to gain international work experience in various business units.

7 Structure of the Uniper Trainee Program

The number and length of placements can be aligned according to individual interests and in consultation with the mentor.

8 Agenda

Uniper’s Role in the Energy World

Our Equity Story

Profit Warnings, Guidance & Communication – What is „good“ IR-work?

Importance of Rating – The case of Fortum & Uniper

9 Spin-offs Provide a Unique Opportunity

Parent firm distributes shares of the spin-off subsidiary to all existing parent company shareholders

Shareholders Shareholders

Parent Company Value Parent Spin-off creation Company (Subsidiary B) Subsidiary A

Subsidiary A Subsidiary B

10 Capital market positioning milestones

Dec. 2014 : E.ON decides to split

Jan. 2016: Uniper operationally independent

Apr. 2016: Kick-off financing process

Apr. 2016: First Capital Market Day

May 2016: S&P publishes BBB- rating

Jun. 2016: E.ON AGM formally to spin-off Uniper Roadshow Institutional 150 meetings held 250+ investors met Jul. 2016: Syndication completed with 15 banks Key conferences Days on the road attended meeting investors 10+ 40+ Sep. 2016 : Stock exchange listing

11 “We Will See a Bloodbath Today” – n-tv in the morning of listing Initial set-up • Separation of companies on Jan 1, 2016 • General outlook on business given • Government decision on nuclear liabilities

16H1: Headwinds from the markets • Commodity market downturn in 16Q1 • Negative outlook for utilities in general • Write-downs after impairment test in Power Prices 16Q2 Gas Prices (NCG)

€/MWh 55 €/MWh Before listing day 30 • Wide range of forecast market 45 capitalization ranging from €2bn to €5bn+ 25 • Featuring considerable market 35 uncertainty 20 25 NordPNordic Pow 2016 DEGermany Pow 2016 15 15 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

12 Uniper’s Answer for the Capital Markets

Key concerns Key messages Laying the foundation Capital Markets Day  Achievability of dividends  Reduction of capex First disclosure: H1’16  Sustainability of cash flow  Divestments  Credit rating implications  Cost cutting  Emphasis on non-wholesale earnings Apr – Sep 2016 Roadshows Uniper Listing 12/9

Building credibility, 9M’2016 results Cost cuts quantified increasing visibility YR transaction Key theme: announced Base dividend + Optionality FY 2016 results 2016 targets Sep 2016 – Mar 2017 delivered

Deep Dive Base margin Driving valuation Gas midstream + optionality concept: increased transparency 6M’2017 results Upgrade of 2017 targets Key theme:

Deep Dive Generation Upsides from Growing dividend + Optionality decarbonisation

Since Q2 2017 Strategic and financial update Dividend growth 25% CAGR until 2020

13 Uniper’s Attractive Dividend Policy

Uniper’s dividend policy Dividend growth

€m Operating Cash Flow 25% CAGR

329 +/ Working capital effects 271 - 201 489 390 313 - FFO Adjustments 200 250 Aspiration

Adjusted Funds from Operations FY2016 FY2017 FY2018 FY2019E FY2020E

- Maintenance investments Key messages  A purely cash flow based dividend story Free Cash from Operations  Above sector average payout ratio with at least 75% of FCfO to be cashed (FCfO) out  Starting with a base dividend in FY2016 to set the benchmark  Ambitious dividend growth path of CAGR 25% between 2016 and 2020 75% - 100%  Favorable free cash flow growth and outpacing 25% growth path for Dividend payout on FCfO financial year 2017 and 2018

14 Uniper Way – a Different Way to Shape the Culture

Keep & Foster  Stop  Start ! Start ! Leadership Valuing our people  Being inconsequential Taking responsibility Grow and empower people and their capabilities

Teamwork Working Thinking in Reducing complexity Become one team together silos and simplify proceedings

Your Individual Contribution Staying in your Striving for excellence Being entrepreneurial comfort zone Act as if it were your own company

15 Uniper’s Share Price History

Laying the foundation Building credibility Driving valuation

16 Is Uniper‘s Current Share Price Fair?

EV / EBITDA 2020: Uniper vs. Peers 2 P / E 2020 April’19 today “expensive” “expensive”

13,5 20,0 10,8 17,1 8,3 7,6 8,5 14,0 15,6 14,7 15,6 5,6

“cheap” “cheap”

Dividend yield 2020 (in %) Sum of the parts (analysts estimates) 2 7.7x 7.8x 8.5x 7.1x “cheap” 4.5x 10.4 2,2 2.6 12,9 2,5 9,6 8,4 -1.4 5,1 5,0 5,6 26.3 3,5 4,3 -

3,2 €bn - Value Power Global Other/

“expensive” Enterprise Price Price (€) Generation International EquityValue Target Target Share Commodities Consolidation

1. Using Bloomberg quotes; “Generators” group includes RWE, Fortum, Verbund, CEZ, Drax; “Semi-regulated” group includes E.ON, EDF, Enel, Engie, Endesa, Iberdrola, Innogy, EDP, Centrica; “Regulated” group inlcudes Enagas, Red Electrica, Seven Trent, Pennon, National Grid, REN 2. EV on “Uniper vs Peers” chart includes market value for equity, EV on SOTP chart includes value for Equity based on analysts’ target prices 17 Uniper’s Shareholder Base – Finnish Investor

Fortum  After the spin-off, E.ON sold its stake in Elliott 49.99% 17.84% Uniper to Fortum. As of today the Finnish utility holds 49.99% of Uniper shares.

Knight  On October 8 th 2020 Fortum signed a deal Vinke to purchase at least 20.5% of additional 5.32% Others 26.85% shares from Elliot & Knight Vinke, which Rank Institution % of S/O will increase Fortum‘s stake to at least 1 BlackRock Fund Advisors 1,76% 70.5% 2 The Vanguard Group, Inc. 1,53% 3 DWS Investment GmbH 1,09%  The transaction is subject to approval from 4 Norges Bank Investment Management (Norway) 1,09% 5 State Street Global Advisors (SSgA) 0,88% Russian authorities, which is still pending 6 Dimensional Fund Advisors, L.P. (U.S.) 0,80% 7 BlackRock Advisors (U.K.), LTD 0,51%  Final closing expected for Q1 2020 8 SAFE (China) 0,48% according to Fortum 9 UBS Asset Management (U.K.), LTD 0,46% 10 Amundi Asset Management S.A. 0,44%

18 Agenda

Uniper’s Role in the Energy World

Our Equity Story

Profit Warnings, Guidance & Communication – What is „good“ IR-work?

Importance of Rating – The case of Fortum & Uniper

19 Impact of Profit Warnings on Individual Careers

Pieter Haas und sein Finanzvorstand Nach Gewinnwarnung: Innogy-Chef mit KRONES-Finanzchef muss müssen nach Gewinnwarnungen und sofortiger Wirkung entlassen (20.12.2017) nach Gewinnwarnung gehen Aktienabsturz gehen (14.10.2018) (24.07.2019)

Kuka CEO Till Reuter geht: „Es gab -Chef Jürgen Schachler wurde mit Nach Gewinnwarnung: zwei Gewinnwarnungen. Wir haben sofortiger Wirkung entlassen. Ein Siemens-Chef Löscher muss uns zusammengesetzt und gemein- millionenschweres Investitionsprojekt ist gehen (27.07.2013) sam entschieden, dass es eine gescheitert und eine Gewinnwarnung Veränderung geben soll“ (26.11.2018) besorgte die Anleger (13.06.2019)

20 Ad Hoc Disclosure of Inside Information

EU Market Abuse Regulation (16.04.2014)

An issuer shall inform the public as soon as possible of General Rule inside information which directly concerns that issuer.

 information of a precise nature, Definition of  not been made public,  relating, directly or indirectly, to issuers or financial Inside instruments, and which Information  likely to have a significant effect on the prices, if made public

Delayed disclosure to the public of inside information only possible, if all of the following conditions are met: (a) immediate disclosure is likely to prejudice the legitimate interests of the issuer or emission allowance market Exemption participant; Uniper SE: Uniper hebt Ergebnisprognose für das (b) delay of disclosure is not likely to mislead the public; Geschäftsjahr 2019 an Uniper SE / Schlagwort(e): Prognoseänderung Uniper SE: Uniper hebt (c) the issuer is able to ensure the confidentiality of that Ergebnisprognose für das Geschäftsjahr 2019 an information.

21 Uniper‘s H1 2019 Process – Need for a Profit Warning?

„Insiderinformationen im Zusammenhang mit dem Jahresabschluss entstehen dabei i.d.R. bereits vor H1 Closing Process H1 Aufstellung/Feststellung des relevanten Abschlusses“ (BaFin; Art. 17 MAR FAQs) Financial Cut-off for H1 CFO Disclosure Results First draft of H1 for CFO indicating adj. 6M EBIT about 300m€ Statements 30.06. Briefing Committee 08.08. i.e. ~50% below prior year

Trigger for a Profit Warning?

Recap Definition of Inside Information This is the case for financial information, if there is a significant deviation from

information of a precise nature, 1. Intra-year forecasts published by company X not been made public, (if not available, then) relating, directly or indirectly, to issuers or financial 2. Market expectation i.e. consensus ? instruments, and which (if not available, then) ? likely to have a significant effect on the prices, 3. Prior year figures if made public

22 Uniper‘s H1 2019 Process – Consensus in Line with H1

6M Consensus 6M H1 Results Adjusted Adjusted Adjusted net EBIT EBITDA income Highest 315 655 200 Lowest 301 649 165 Mean 309 652 180 Median 311 653 172 Number of estimates 6 5 5

No significant deviation!

Not likely to have an impact on share price!

No profit warning! 23 How to Provide Guidance for a ‚fair‘ Consensus?

1. Continous Tracking of Consensus 2. Use of all public available Data 3. Increase Business & KPI Understanding Financials from past periods

Reference to given Guidance

Operational indicators (storage-filling levels, prices, weather, announced outages)

Prerequisite: Credibility of the IR guidance based on track record

24 Communication of Earnings – The WHY Matters! „Expected“

Anticipated in Full-Year Guidance and related Anticipated in Full-Year to underlying Business Guidance but one-off in (i.e. part of the nature and hence part Analyst‘s model) of the analyst model

e.g. higher/lower e.g. Lapse of provision earnings due to releases changed power prices „Operational“ „Non-Operational“

Not Anticipated in Full- Not Anticipated in Full- Year Guidance and Year Guidance and related to underlying one-off in nature so  Earnings driven by effects that neither the analyst nor the business (i.e. part of that it is not part of the company are able to predict/control the Analyst‘s model) analyst model  Lack of transparency on underlying business  Forward-looking valuation is impaired e.g. Lower power e.g. accounting  „Random/Black Box“-feeling volumes due to anomalies like IFRS 9,  Lower valuation for the business unplanned outage carbon phasing

„Unexpected“ 25 Example from Uniper SE, H1 2019 H1 Uniper 2019 SE, Results, 08 Interim from Example Reconciliation Adj. EBIT H1 2018 to H1 2019H1 to 2018 H1 EBIT Adj. Reconciliation d.EI 121 Down Adj.Largely EBIT H1Due 2019to Structural– E €m New To revert YoY Guided Unavailability MV3/RH2Unavailability Regulation (UK (UK Cap.) Regulation Outright (price effect)(price Outright Unavailability FranceUnavailability Russia performanceRussia Adj. EBIT H1 2019 H1 EBIT Adj. Adj. EBIT H1 2018 H1 EBIT Adj. H1 2018 One-offs 2018 H1 Coal impairments Coal Commodity Gas Commodity Carbon phasingCarbon LNG Freeport LNG Other 308 601 Aug. 2019 2019 Aug.   for yearrelevancedrivers withare: full New   negativeMost effects are either: developmentsKey Russia overcompensated strong byperformance in 2, 3 & Ringhals Outages Maasvlakte in basis development year-on-yearon full-year ‘towon’ti.e. revert’,be impacting the guidance,full-year or ‘Guided’,i.e. they are anticipated within ffects 26 So, how was H1 Percieved by the Capital Market?

„Overall, we believe today‘s results are a ‚non-Event‘ “

27 Agenda

Uniper’s Role in the Energy World

Our Equity Story

Profit Warnings, Guidance & Communication – What is „good“ IR-work?

Importance of Rating – The case of Fortum & Uniper

28 Uniper’s Balance Sheet Shows Virtually no “Bank Debt”

Uniper’s Economic Net Debt (in €bn) The different types of financing at Uniper

Asset Retirement Revolving  Back-up facility for overall short-term funding Obligations 0.9 Credit Facility instruments and for credit rating purposes

0.8 Pension provisions1.0 Commercial  Commercial paper used for short-term liquidity 0.5 Paper Program fluctuations (OTC, usually one month duration) 0.7 Commercial Paper 0.5 Subsidiary Fin.  Liabilities that are not managed on 2.4 2.5 Liabilities level, mainly leases and margining liabilities 1.4 Subsidiary Financial Liabilities Liquid funds  Liquid funds of €1.5bn as of Dec 2018 (1.1) Liquid Funds (1.5)

(0.4) Margining Margining Receivables (0.7) Receivables  Margining cashed-out for commodity forward deals

31/12/2017 31/12/2018

29 Trading Business Requires Margining Capital

Example: Power price hedging Uniper is a large-scale commodity trader 200 70 InvestmentNon-investment grade grade rating rating  Procurement: CO 2 emission certificates, fuels Agreed forward price: 35€/MWh, for power production such as coal and gas Contract volume: 10 million MWh 150 60  Forward hedging of power prices €160m  In addition: Hedging of exchange and interest rates, optimization gains 100 50  More than 100,000 trades per day Power Power price in €/MWh Margining Margining requirement Power Power price in €/MWh Margining Margining requirement 50 40 Margin postings €80m  Trading results in margin postings that are

usually provided in the form of cash collateral 0 30  The amount of margins to be posted Dez 17 Mrz 18 Jun 18 Sep 18 Dez 18 Mrz 19 Jun 19 depends on a company’s rating, i.e. its Potential additional marginingMargining requirement requirement UniperMargining requirementPower PriceUniper Power Price creditworthiness  Average amount of margins posted by Uniper Maintaining a large-scale trading business in 2018: ~€900m requires an investment grade rating

30 Uniper’s Current Rating Based on S&P’s Methodology

S&P Corporate Criteria Framework Modest BBB  S&P’s rating assessment is driven by a Financial Risk bbb+ Modifiers bbb combination of a company’s business risk Profile  Capital structure Issuer Stand-Alone and financial risk profiles  Financial policy Credit Anchor Credit Profile  Liquidity  The resulting anchor is equal to the final issuer (SACP) Rating credit rating in 90% of the cases Business Risk  Management (ICR) Profile  Comparables  Uniper’s anchor is lowered by a modifier for Potential comparables’ rating analysis Satisfactory -1 government Current rating BBB  solid investment grade support Uniper 0

Rating-Anchor – Combination of business and financial risk profile Current rating guidance for Uniper Financial Risk  Uniper’s business risk profile is currently assessed as Business Risk 1 (minimal) 2 (modest) 3 (intermediate) 4 (significant) 5 (aggressive) 6 (highly levered) ‘satisfactory’ , although at the lower end of the category 1 (excellent) aaa/aa+ aa a+/a a- bbb bbb-/bb+  Given this ‘satisfactory’ business risk profile: For a BBB (flat) 2 (strong) aa/aa- a+/a a-/bbb+ bbb bb+ bb rating Uniper currently needs to achieve an FFO/Debt of >55% 3 (satisfactory) a/a- bbb+ bbb/bbb- bbb-/bb+ bb b+ (‘Modest’ financial risk profile) 4 (fair) bbb/bbb- bbb- bb+ bb bb- b Standard & Poor‘s Translation into 5 (weak) bb+ bb+ bb bb- b+ b/b- Uniper‘s target rating ratios Uniper debt factor 6 (vulnerable) bb- bb- bb-/b+ b+ b b- rating (FFO / Net Debt) (Net Debt/EBITDA)

1.8 – BBB >55% 2.0x 31 Key Takeaways from S&P CreditWatch Report

The CreditWatch placement for Fortum reflects the significant likelihood of a Source: one-notch downgrade once the deal closes.” S&P Research Update We expect to resolve the CreditWatch placement on Fortum when the transaction (Oct 09, 2019) closes and after receiving clarity on potential remedy measures.” “Fortum Oyj and Uniper SE Ratings on CreditWatch Negative Following Fortum’s Given the business risk deterioration, [Fortum] will need stronger financial metrics to Purchase of Additional Stake in Uniper” achieve the same rating level; for a 'BBB' rating, funds from operations to debt would need to be above 35% , compared to 25% today.”

We will likely fully consolidate Uniper into Fortum and link the issuer credit rating on Uniper to that on Fortum upon antitrust approval.”

We expect to resolve the CreditWatch placement on Uniper in line with that on Fortum, when the transaction closes and after receiving more clarity on Fortum's intended group strategy and implementation thereof, as well as on future Uniper's governance and financial policy.”

We could rate Uniper one notch above Fortum if there were sufficient elements of separation between the two companies post-closing.”

32 ThankUniper You! debt inherited from E.ON at spin-offwww.uniper.energy/careers has been optimized

Economic Net Debt Debt Structure has been put on solid footing has significantly come down since spin-off Liquid funds  Liquid funds of €1.0bn per H1 2018 (€1.0bn) In €bn 6,7 Commercial  Commercial paper used for short-term liquidity fluctuations Paper Program Asset (€1.8bn) (OTC, usually one month duration) Retirement 1,0 Obligations 0,8 Revolving Credit Facility  Back-up facility for overall short-term funding instruments Pension 4,2 (€1.8bn) and for credit rating purposes provisions 3,3 1,0 2,4 Debt Issuance  Framework for issuing mid to long-term corporate bonds on 3,4 0,9 Program (€2.0bn) HoldCo 0,8 capital markets (usually longer than 2 years) Financial 1,0 0,8 Liabilities 1,3 0,7 0,5 Uniper managed to lift its S&P rating to BBB Subsidiary 0,5 2,1 2,1 Positive Financial 1,6 1,4 Liabitilities BBB / Baa2 -0,5 -0,5 Negative Liquid Funds -1,1 -1,0 Positive BBB- / Baa3 Q4/15 Q4/16 Q4/17 Q2/18 Negative 2016 2017 2018 RWE S&P Moody’s Fitch E.ON innogy Fortum

33