Finance Strategy

Uniper strives for a healthy balance shareholder dividends and balance sheet stability. Uniper’s finance strategy rests on three pillars: dividend policy, solid cash generation and a comfortable investment-grade rating.

Overview

Dividend policy

  • Payout related to free cash from operations (FCfO) based on the success of business activities
  • We target a neutral to positive free cash flow from operations post-dividends
  • For the financial year 2017 and based on our dividend policy, a total dividend of €271m or €0.74 per share was distributed (2016: €200m or €0.55 per share).

Free cash flow

    Uniper aims at continuously optimising its free cash flow:

  • Investments focused on maintenance
  • Remaining growth projects financed from disposal proceeds
  • Rigorous cost and optimisation measures

Capital structure and rating

  • Uniper pursues a conservative finance strategy by targeting to maintain a comfortable investment grade rating
  • Continuous management of capital structure by means of leverage ratio
  • Working capital requirements of the ongoing business are to be met by excess liquidity and credit lines

Top-management incentives are strongly aligned to the interests of the shareholders. Uniper’s management is committed to high standards concerning the transparency and the risk management within the scope of its corporate governance.

Dividend policy and free cash flow

For the financial year 2018 and based on our dividend policy, a dividend to shareholders of €310m is currently envisaged. The aspiration until 2020 is a compounded annual dividend growth rate of 25%. The dividend level is oriented at 75-100% of free cash from operations (FCfO). Overall, Uniper targets neutral to positive free cash from operations post dividends.

Uniper is carrying out measures to optimise its free cash flow on a continuous basis. To this end investment is focused on maintenance with additional rigorous cost and optimization measures being implemented. Remaining growth projects shall be funded by disposal proceeds.

Capital structure & rating

Uniper’s goal is to generate neutral to positive free cash from operations after dividend payment. The announced and mostly executed asset disposals of €2.0bn as well as cost reduction measures by 2018 allowed Uniper to achieve its target leverage ratio. To this end Uniper’s current debt factor (ratio of economic net debt to adjusted EBITDA) was reduced to below 2.0x. This ratio is in line with Uniper’s target of achieving a comfortable investment grade rating and should be maintained in the future.

in €bn 30 Jun 2016 31 Dec 2016 30 Jun 2017 31 Dec 2017 30 Jun 2018 Target value
Asset Retirement Obligations (AROs) 0.9 1.0 1.0 1.0 0.9
Pensions 1.2 0.8 0.6 0.7 0.8
Net financial position (NFP) 1.5 2.4 1.6 0.8 1.6
Economic Net Debt (END) 3.6 4.2 3.3 2.4 3.3
END / EBITDA** 2.0x 1.4x below 2.0x

** EBITDA means adjusted earnings before interest, taxes, depreciation and amortization