RWE Executive Board resolves "pooling
of the renewable energy, grids and retail business areas in a new subsidiary"
and IPO of approximately 10%
The Executive Board of RWE AG has decided to restructure by pooling renewable
energy, grids and retail business areas in Germany and abroad in a new
subsidiary.
Approximately 10% of the new subsidiary will
be offered for sale by way of an initial public offering which is expected
to take place at the end of 2016. At the same or later point in time, additional
stakes may be disposed. By transferring these business areas to the new
subsidiary, RWE AG will create new financing and additional growth opportunities
for the activities pooled in the subsidiary. The restructuring will not
change the assets at RWE AG’s disposal to meet its financial commitments.
"The Group's restructuring is our response to the transformation of
the European energy landscape," says Peter Terium, CEO of RWE AG.
"We are creating two viable companies under one roof. The new subsidiary
will have its own access to the capital market and improve our growth prospects.
At the same time, we are convinced that conventional power generation will
remain an irreplaceable partner for renewable energy for decades to come.
Our conventional power stations are the backup for renewables."
Terium continues: "During the last three years, we
have turned RWE into a financially more stable, more efficient and agile
company, which has moved closer to its customers. Now we are taking the
next logical step in our transformation process. By establishing the new
company, we are creating one of Europe's leading innovative energy companies
with substantial expertise in managing decentralised energy systems. Within
the new structure, we will continue to bear our responsibility in the conventional
energy landscape and satisfy the needs of tomorrow's energy world.”
"We will also continue to stand by our responsibilities with regards
to nuclear energy. This will not be affected by the new structure. On the
contrary, the shares of the new subsidiary will be an asset that will make
it easier for us to fund provisions in the future if necessary, whatever
the circumstances."
"The new company will be an attractive dividend stock and also reinforce
RWE AG's financial strength," says Peter Terium. "The capital
increase will boost our investment capacity. I am extremely confident that
our clear focus on our future-oriented business fields and the additional
investment capital will enable us to create added value for the Group as
a whole. The IPO is therefore in the interest of all our stakeholders."
The subsidiary is expected to begin operating as an independent company
in the course of 2016. The Group's restructuring will be carried out in
close co-operation with employee representatives in line with our tried
and tested social partnership.
This statement today follows announcements earlier this month showing that
in the first three quarters of 2015, the RWE Group’s EBITDA was down 6%
year on year to €4.4 billion and its operating result decreased by 9%
to €2.6 billion.
This performance was blamed on price-induced shrinkage of margins in conventional
electricity generation. The Renewables Division on the other hand recorded
a marked improvement in earnings. This was due in particular to the commissioning
of the new wind farms Gwynt y Môr off the coast of North Wales and Nordsee
Ost near Heligoland. “RWE Innogy is really taking off now – from a small
seed three years ago it has become a model of success,” said RWE AG CEO
Peter Terium. “Innogy’s success is both an inspiration and a goal for
our other innovative business models.”
The renewables division will have a portfolio with an electricity generation
capacity of more than 3.5 gigawatts and a strong focus on wind power. In
grids, the company will be one of the main operators in Central Europe,
with a 550,000 kilometre-long distribution network.
In the retail business, the new subsidiary will serve over 23 million customers
in twelve European markets and rank among the pace-setters of innovative
customer solutions. Based on "pro-forma" figures for 2015, the
new company is expected to achieve external revenue of more than €40 billion
and EBITDA of over €4 billion. The company would employ approximately
40,000 of the RWE Group's nearly 60,000 staff members. The new company
will probably be headquartered in Essen as is RWE AG.
The whole transaction is subject to the approval of the Supervisory Board
which is expected to decide in its meeting on 11 December 2015.
A similar strategy was announced May this year by Eon that in 2016, the
E.ON brand will focus on renewables, energy networks, and customer solutions,
whereas Uniper will operate a conventional energy business consisting of
conventional power generation (including hydro) and global energy trading.
