Finance Strategy

Uniper strives for a healthy balance between attractive cash returns and balance sheet stability. Uniper’s finance strategy rests on three cornerstones - dividend policy, free cash flow and a comfortable investment grade rating.

Overview

Dividend policy

  • Payout related to free cash from operations based on the success of business activities
  • We target a neutral to positive free cash flows from operations post-dividends
  • For the financial year 2017 and based on our dividend policy, we currently foresee a dividend level for 2017 of €250m (2016 was €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
  • Deleveraging from free cash flows and divestments

Capital structure and rating

  • Uniper pursues a conservative finance strategy by targeting a comfortable investment grade rating
  • Continuous management of capital structure and leverage
  • 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 2017 and based on our dividend policy, a dividend to shareholders of €250m is currently envisaged. 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. In combination with announced asset disposals of €2.0 bn this will allow Uniper to achieve its target leverage ratios by 2018. To this end Uniper’s current debt factor (ratio of economic net debt to adjusted EBITDA) shall be reduced to comfortably below 2.0x, and net financial debt to adjusted EBITDA ratio to below 1.0x. These ratios are in line with Uniper’s target of achieving a comfortable investment grade rating.

in €bn 31 Dec 2015 Pro forma*
31 Dec 2015
30 Jun 2016 30 Dec 2016 30 Jun 2017 Target values
Asset Retirement Obligations (AROs) 1.0 0.9 1.0 1.0
Pensions 0.8 1.2 0.8 0.6
Net financial position (NFP) 4.9 1.5 2.4 1.6
Economic Net Debt (END) 6.7 4.7 3.6 4.2 3.3
END / EBITDA** 3.9x 2.7x 2.0x Comfortably below 2.0x
NFP / EBITDA** 2.9x 1.1x Below 1.0x