RWE Aktiengesellschaft Q1 Earnings Call Highlights
RWE Aktiengesellschaft (ETR:RWE) reported a stronger first quarter for fiscal 2026, with Chief Financial Officer Michael Müller telling analysts that the company had a “good start” to the year and was increasingly confident in meeting its full-year targets.
Müller said adjusted EBITDA rose 25% year over year to EUR 1.6 billion, while adjusted net income reached EUR 600 million. Earnings per share were EUR 0.85, up 25% from the prior-year period. He said the company had already achieved 30% of its full-year EBITDA guidance and 33% of its adjusted EPS guidance.
“We confirm our guidance,” Müller said. “We are now even more confident of achieving our targets.”
Offshore and Onshore Renewables Lift Results
RWE’s offshore wind business generated adjusted EBITDA of EUR 570 million in the quarter. Müller said earnings were “significantly higher than last year,” primarily because wind conditions normalized after a weaker comparable period.
The company also highlighted operational progress across its offshore development pipeline. Müller said all offshore wind projects under construction remain on budget and on schedule to meet planned commercial operation dates. RWE’s Danish Thor and British Sofia offshore wind projects both generated first power during the quarter.
Onshore wind and solar posted adjusted EBITDA of EUR 507 million. Müller attributed the increase mainly to organic growth, especially in the United States, and better wind conditions in Europe. Those gains were partly offset by lower hedge prices in Europe and the U.S. compared with a particularly strong prior-year quarter, as well as a negative foreign exchange effect in the U.S.
In response to analyst questions about U.S. renewables demand, Müller said RWE’s view was unchanged and remained “on a very high level.” He said the company continued to see strong interest in power purchase agreements for wind and solar projects with clear commercial operation dates.
Flexible Generation Boosted by One-Time Compensation
RWE’s Flexible Generation business recorded adjusted EBITDA of EUR 657 million. The result included a EUR 332 million compensation payment related to production restrictions at the Eemshaven power plant in the Netherlands in 2022, which Müller said had been approved by the European Commission.
During the question-and-answer session, Jefferies analyst Ahmed Farman asked whether the EUR 332 million had been included in the company’s March guidance. Müller said it had not, meaning the payment came “on top” of prior expectations. He added that RWE’s underlying view of the business had not changed since March.
Asked about gas-fired generation profitability, Müller said lower combined-cycle gas turbine volumes in the U.K. and the Netherlands reflected normalized wind conditions compared with last year, rather than a negative pricing effect. He also said current energy-market conditions differ from the 2022 crisis because the rebalancing of gas demand is occurring more globally and French nuclear availability is not presenting the same constraints as in 2022.
Trading Unit Posts Weak Start
RWE’s supply and trading business reported adjusted EBITDA of minus EUR 84 million in the quarter. Müller described the result as a weak start but said the company remained confident in achieving its full-year guidance for the unit.
Goldman Sachs analyst Alberto Gandolfi asked for more color on the trading environment. Müller said market volatility had risen, but not all volatility was favorable for trading. He said some first-quarter volatility stemmed from rumors, announcements around the EU trading system and the start of the war, rather than fundamentals.
“That’s not necessarily what our traders like,” Müller said, adding that volatility not driven by fundamentals contributed to the negative first-quarter impact.
Cash Flow, Debt and Capital Returns
Adjusted operating cash flow was minus EUR 2.3 billion at the end of the quarter, which Müller said was driven by seasonal effects in operating working capital, changes in provisions and non-cash items. He cited the seasonal purchase of CO2 certificates and an increase in accounts payable as factors behind working-capital movements.
Net debt rose to EUR 15.6 billion, reflecting investments and seasonal cash-flow effects. RWE invested EUR 2.3 billion net during the quarter, mainly in offshore wind, onshore wind and solar growth. Müller said the company expects net debt to be at its three-times leverage target by year-end.
RWE also paid a dividend of EUR 1.20 per share following its annual general meeting in May. Müller said the company’s EUR 1.5 billion share buyback program remains on track to conclude by May 2026.
For 2026, RWE reaffirmed its outlook for adjusted EBITDA of EUR 5.2 billion to EUR 5.8 billion, adjusted net income of EUR 1.5 billion to EUR 2.05 billion and adjusted earnings per share of EUR 2.20 to EUR 2.90. The company’s dividend target for the year is EUR 1.32 per share, consistent with its annual 10% dividend growth target.
Capacity Auctions and Market Outlook
RWE said it secured 6.4 gigawatts in the U.K. T-4 capacity auction for delivery in 2029 and 2030. Müller said 39 assets across gas, hydro, wind and battery storage were successful, including four assets that secured three-year agreements.
Analysts also pressed management on upcoming German capacity auctions. Müller said the current plan calls for two auctions, one in September and one in December, with 9 gigawatts split into two 4.5-gigawatt auctions. He said the design is expected to be pay-as-bid, though RWE would have preferred pay-as-clear.
“We do have competitive projects at hand, and we also will bid them with the right return expectations,” Müller said.
On broader European energy policy, Müller said Brussels appears to have learned lessons from the previous energy crisis by maintaining the energy-only market design and the EU emissions trading system. He said governments have recognized that resilience and independence in Europe require more renewables, more electrification and flexible generation such as batteries and gas assets.
RWE also addressed leadership changes in offshore wind. Müller said Sven, the offshore wind CEO, had decided not to extend his contract but would remain available through an advisory contract. Tobias Keitel is expected to take over the CEO role, with Müller expressing confidence in the incoming offshore management team.
About RWE Aktiengesellschaft (ETR:RWE)
RWE Aktiengesellschaft generates and supplies electricity from renewable and conventional sources in Germany, the United Kingdom, rest of Europe, North America, and internationally. It operates through five segments: Offshore Wind; Onshore Wind/Solar; Hydro/Biomass/Gas; Supply Trading; and Coal/Nuclear. The company generates wind, hydro, solar, nuclear, gas, and biomass electricity. It also trades in electricity, gas, and energy commodities; operates gas storage facilities; and engages in battery storage activities.
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