Gunhild Grieve - Head of Investor Relations Markus Krebber - Chief Financial Officer

Vincent Gilles - Crédit Suisse Alberto Gandolfi - Goldman Sachs Deepa Venkateswaran - Sanford C. Bernstein Ahmed Farman - Jefferies Michel Debs - Citigroup John Musk - RBC Capital Markets Lueder Schumacher - Société Générale Mark Lewis - Barclays José López - Millenium Capital Partners Nick Ashworth - Morgan Stanley

Good morning to everyone on the phone and to those who are joining us via webcast. I'm joined here by Markus Krebber for the Presentation on the First Three Months of Fiscal Year 2017. This is the first quarterly results presentation after our Capital Market Day, where we will concentrate on RWE stand-alone. Where appropriate, we show the relevant group figures, which you can also find in the interim statement. In order to focus on your questions, we've kept it short. So let me hand over to Markus.

Thank you, Gunhild, and good morning, ladies and gentlemen. A few exciting weeks are lying behind us. After we presented our new equity story at our Capital Market Day and subsequently discussed our strategy and financial setup in more detail on the road, we were pleased to see that we have started to adopt the RWE stand-alone view in your models, which will be also our focus in this presentation. So let's turn to the review of the first quarter of 2017. We had a good start to the year. The operational performance of the RWE Group was moderately below the previous year, in line with our expectations. For RWE's operating businesses, the development of European Power and Supply & Trading was quite favorable in the first three months of 2017. Based on the Q1 results, we can confirm the outlook for the year as a whole. In Q1, the fourth UK capacity auction took place. After the situation for hardcore players deteriorated and the British government wanted to avoid shortfalls, they brought the stock of the capacity market one-year forward to 2017 and '18. We successfully secured contracts for all our sites. It was a total capacity of 7.9 gigawatt. However, at £6.95 per kilowatt, the auction created a much lower price than seen in the previous auctions. The first quarter also saw the successful completion of the change of guarantor and creditor for the outstanding RWE AG senior bonds to Energy. This leads mainly the hybrid capital and the EIB loans at RWE with letters still expected to be transferred to Energy by June 2017. As we announced in mid-February, we called CHF250 million hybrid bond on its first call date on April 4th and have not refinanced it. I explained at our Capital Market Day that we will still see merits in our hybrid capital, but want to adjust the size of the overall program to reflect the new capital structure. Therefore, we intend to also call the remaining hybrids with the first call date in 2017 and will not replace them. This includes another CHF150 million in July and US$1 billion in October. As you might remember, these hybrids are backed by intercompany loans with Energy. So there is no impact on our liquidity. Despite taking away the full equity credit for all our remaining hybrids, Standard & Poor's confirmed our BBB- rating and stable outlook. With this they acknowledged the improved financial situation after the IPO of Energy. At the beginning of April, Fitch followed with its rating opinion on RWE stand-alone. They confirmed a BBB flat rating and upgraded the outlook from negative to stable. Then move onto the operational performance. Slide 4 shows the development of adjusted EBITDA. For RWE stand-alone, it amounted to €540 million, fully in line with our expectations. This result does not yet include any contribution from our energy participation. The €683 million in dividend will be fully recognized in Q2 2017. Slide five provides the details of the performance of the Lignite & Nuclear division in Q1 and the outlook for this division for the full year. Adjusted EBITDA has come down significantly, mainly due to decline in realized generation margins and lower volumes from our nuclear power plants. This could only partly be offset by improvements in our operational cost base. This is also the main reason for the outlook for fiscal year '17 of significantly below previous year, despite the absence of non-recurring items. However, the margin decline is disproportionately high in the Q1 figures compared to the full year. The European Power division had a good start to the year. Tight situations like Dunkelflaute saw no wind and no sun in Germany in Q1 led to a very good result from commercial asset optimization. This overcompensated for the decline in realized margins. Together with cost improvements this led to an increase in adjusted EBITDA to €167 million. Non-recurring items in this division were mainly relating to land sales in the UK. It is still early in the year, we cannot expect the positive trends in commercial asset optimization to recur in the following quarters. Hence, at this point in time, we maintain our outlook for the full year to be significantly down year-on-year, but we are a bit more optimistic than we have been in March. This brings me to the current hedge position on slide seven. Compared to our situation at the end of last year, we have reduced the implicit fuel hedge for 2018 and increased the fully hedged position. The hedge spread position in European Power has also gone up to 60%. In 2019 and 2020, we have increased the implicit fuel hedge positions. Our hedge price for 2019 has improved by approximately €1 per megawatt hour since the end of last year, in line with improvement of the fuel spreads in Q1. At the back of our 2019, our client volumes is hedged via our implicit fuel hedges. There is additional upside potential from further improvements of the spreads. On the European Power side, we are still mostly un-hedged from '19 and '20. Now onto the performance of Supply & Trading, on slide eight. Also, the division had a good start to fiscal year 2017, at EBITDA of €146 million was slightly below the very strong Q1 2016. Furthermore, last year, we benefited from the sale of Lynemouth power plant in Q1. The non-recurring items in 2016 refer to the legacy gas book, including the long-term gas storage contracts, which we adjusted to market prices in Q2 2016. Looking at 2017 can, and confirmed by the good results in the first quarter, we are optimistic we will turn back to normalized earnings, which we see on average in the order of €200 million per annum. Ladies and gentlemen, having explained the operational performance, slide nine provides the other earnings drivers down to adjusted net income. Besides the usual reversal of the non-operating result adjustment in Q1, refer also to the financial result. Here we have adjusted for the effects from the change in discount rates for nuclear and other long-term provisions. Taxes and minorities were adjusted accordingly. You can find the details in the backup of the document. Now onto distributable cash flow on Slide 10. The reconciliation from EBITDA to distributable cash flow is dominated by the seasonal development of the operating working capital in Q1. This is mainly due to normal timing effects since we purchased most of our required CO2 certificates in the first quarter of the year. This will revert in Q1 once the certificates for emissions in 2016 are delivered to the national clearing authorities. As we mentioned at our Capital Market Day, we would assume changes in net working capital to be neutral over time. Change in provision and other noncash items show positive €128 million compared to our outlook of approximately minus €650 million for the year as a whole. Again, recognition of CO2 emission is the reason. In Q1 2017, we have approximately €0.2 billion of additions to CO2 provisions. Provisions will come down in Q2 with the delivery of emission certificates to the national clearing authorities. In addition, we have seen a very low utilization of our nuclear provisions in Q1. Distributable cash flow in Q1 2017 does not yet include the dividend of Energy. In April 2017, we received €683 million for fiscal year 2017. The details of net debt are shown on Slide 11. At the end of March, it stood at €7 billion for RWE stand-alone, nearly unchanged compared to the end of fiscal year '16. They are offsetting effects from the negative distributable cash flow and other channels in net financial debt on the one hand and the change in provisions on the other hand. The main driver for other changes in net financial debt are variation margins. As you know, these effects are temporary. The positive effect in the change of provisions is mainly due to the favorable development of our pension assets and slightly higher discount rate for pension and nuclear provisions. On Slide 12, you can see the details of our outlook for RWE stand-alone for 2017. As I mentioned at the start, we can confirm the outlook for the key performance items, including the confirmation of the trend we provided at the Capital Market Day presentation. This concludes my remarks, and we are now happy to take your questions.

We will now -- sorry, although everybody knows it quite well, just let me remind you of our two-question rules. Operator, please you can start.

Yes [Operator Instructions]. The first question is from Vincent Gilles of Crédit Suisse. Please go ahead.

Two questions, please. The first one is very simply the swing in working capital in the first quarter of the year. You explained very well what this is. Should we assume that it's going to be zero basically at the end of the year, because Q4 will also have the same issue as Q1, I guess, timing difference between supplying and receiving payment. And the second question is you fairly critically highlighted potential upsides on power prices, and we see that you've been hedging a bit more in the first quarter. So my question is, what do you hear from your traders? What do you hear from your specialists? What is your feeling as the CFO regarding the direction of power prices over the next two to three years? Should we be a bit more optimistic, much more optimistic, what would you say to that?

Yes, thanks for your question. I mean, on working capital, we said we assume on average it's going to be hovering around zero, the change in working capital. Whether that's true for every single year, that, of course, depends on valuation effects at year-end. The effect in Q4 is usually the valuation of gas install because we now start filling the gas storages, and we carry most of that on our balance sheet. But on average, we should expect something around zero. And the effect of CO2 certificate in Q1 was around €650 million, which could bring it to zero then. Coming then to your second question, I mean, I will not talk my trader's books and I will not tell you insights in…

That wasn't my question.

Or tell what positions we have, but maybe as a CFO, looking at our hedge positions, yes, you can maybe see what we think about fair valuation of stock market. I mean, you know that, absolute power prices are depending on global fuel prices, and we risk manage that position quite early by transferring that into the implicit fuel hedge. What you can see now, that in '18, we have transferred most of the implicit fuel hedge into an outright position. And with the recent recovery we have seen, which came in much quicker that in the previous years, I think the average price setting fuel spread is close to what we expect when it comes to delivery. In '19 and '20 whatsoever, we still run very large open spread positions. Spreads have been covered in Q1, but we think there is more to come.

The next question is from Alberto Gandolfi of Goldman Sachs.

It's Alberto Gandolfi in Goldman Sachs. I wanted to ask you when I look at RWE as stand-alone, if I look at the EBITDA achieved in Q1 and I add back the dividend from Energy, you effectively have achieved something like 70% of your mid-range EBITDA for the year. So could you say that you expect to be mid or upper part of the range, or is it too soon? And then maybe can you elaborate, if you don't want to commit to narrowing the range, what type of benefit from generation did you get in Q1 from weather? I mean, I understand how. I was wondering if there is any million euro amount you can provide? And the second question is very simple, holding cost, so what [indiscernible] other. I think last year for the full year, it was in the neighborhood of minus €150 million for RWE stand-alone. Now RWE stand-alone Q1, I only saw minus €12 million. And I was wondering if there is a seasonality if last year was not a good starting point, or if you can give us a bit of a guidance for the year?

Yes. Starting with the second question, the holding cost. We don't expect that's going to be up to €150 million. But the €12 million was artificially low. There is no seasonal impact, but that is not something you can extrapolate, so somewhere in the middle of that, the minus €150 million at 4 times €12 million. On the second question, the seasonality, yes, you are right. I mean, we're already close to 70% of our guidance. It is for us too early to narrow the range. So please let me not speculate on whether we end up at the upper range or not. Give us another quarter. And that also -- so to your second question, what if we make in addition to what we have seen in Q1 2016 or maybe also had in the plan, on assumptions on commercial asset optimization that was around €50 million on top of what we have seen in '16 from the situation from the tight capacity situation on the continent.

Did you say 15 or 50, just to be precise, sorry?

50.

The next question is from Deepa Venkateswaran of Bernstein. Please go ahead.

I have two questions. The first one is on hedging. You mentioned that for 2018, you reduced the implicit hedge. I think it was around 40% at the end of December 2016 and now it's 20%. And you said that you've closed that out because you've seen already improvement. But when I look at your chart, your average realized price for '18 is 27% and it was 27% now. So I don't quite see that change coming through. So am I missing something? And could you also highlight any risks from changing your implicit fuel ratio higher or lower? And my second question is on -- there's a comment to make in the quarterly report about the change in regulations about airborne pollutants, and I think what you've said is that it's kind of -- it's too early for you to say, but there is a possibility that you might have to do significant retrofitting or shutdown early. Could you just talk a little bit about what are the risks involved and what time frame are we looking about in terms of Germany deciding what domestic norms it wants, et cetera?

Yes, thanks for the question. Let me start with the second one. I mean, to give you the exact amount of potentially necessary investment into the fleet, that's too early, because we first need the translation of the EU new emission targets into national law because you know that there is a range. So it will depend on how they translate that into domestic targets or requirements. These will come into effect 2021, so still soft time to go. We expect that the German government will pick the topic up now and it might take another six to nine months until we know how the detailed regulation will look like domestically in Germany. On hedging, I mean, we only provide the rounded figures. So it was slightly below the 27%. It is now slightly above the 27%. There wasn't improvement, but it was too tiny to switch it from a full euro. So you are not missing. Basically, we have improved, but the average hedge price has increased, but for rounding reasons, it is stable at 27%.

Does this -- that answer your questions?

Just maybe a follow-up on the emissions. I just want to know can Germany leave the law and norms as they are if they wanted to, or would they need to at least take the lower end of whatever the EU has set?

No, they have to, I mean, according to European law, they have to take at least the upper end of the emission targets. But what is an addition possible, they can go for an interim period. They can release some specific plans based on case-by-case exemption.

The next question is from Ahmed Farman of Jefferies.

Two questions from my side. Just first on the European Power result for Q1 where you talk about the positive commercial asset optimization contribution. Can you maybe sort of elaborate a bit on what were, sort of what are the underlying market conditions that have led to this? Is it lower wind and solar output that has sort of helped you in this, with this result? And then, second question. I think I picked up during, sort of from the statement of the press call that, Markus, you mentioned that you are very convinced that capacity mechanism will be back on the political agenda after the general elections. I mean, whenever this has been looked in the past, policymakers have not gone through it. So I just was wondering has there anything changed? Or where is this sort of your conviction behind this is coming from?

Thanks for the question. I mean, they are related. Let me start with the second question. I mean, what we have seen in Q1, especially in the second half of January is the situation where all Conventional Power Generation was needed and was online and producing because of not untypical situation where we have very low wind production and very low solar production. And that is, of course, also very well known to the regulators and standard setters now. And as you know, another nuclear capacity will go out end of this year. So it will not get better in the coming years. And the full phase of the nuclears will happen by 2022. So it is in, was in the next term of the next government that they have to face this problem. So in our expectation that they rather, that they take it rather sooner than later within the next term. So how did we profit from that? Two elements. First of all, when capacity is scare, the prices for flexibility in the reserve markets are much higher. So we also position our plan in the reserve markets and we achieved much higher returns here. And then, given the price spikes we have seen, almost all capacity was in the money. So from the high spot prices, we also had optimization results because we had more capacity producing than originally anticipated when we do our hedging decisions.

The next question is from Michel Debs of Citigroup.

I have two questions, please. The first one is a long-term question about the German market. I have read in the press, and please confirm if this is correct or not, that RWE believes that by 2050 German internal demand could be around 800-terawatt hours assuming that you have an identification of the heating market to create additional demand. So I just wanted to understand from your perspective if, firstly, this is correct. You genuinely believe that the heating market for DLX is 5. And secondly, in order for that to happen, you need policy changes. If you could just update us on where the policy changes are regarding the switch from fossil fuel to electricity on your heating market? My second question has to do with your full year numbers. I'm looking at your expectation for group net income, €1 billion to €1.3 billion. And against that, we know that Energy should contribute, in it's own report, in €1.2 billion. I do not want to do a simple subtraction because I understand that there is some form of consolidation adjustment between the two numbers. So you could -- you have [indiscernible] translates that full year for the group net income target into an RWE stand-alone net income target and tell us what the adjustments are with Energy?

Thank you for the questions. The second one is quite easy. I mean, the Energy target is 100% energy target. Our target includes only our part of energy. So only the net income attributable to RWE's shareholder. So you have to exclude the 23.2%. We also have given guidance on our own adjusted net income. I think it's also now, again, in this presentation on the last slide of the main part of the presentation. And if you deduct from that the Energy dividend of €683 million, you can see what is the operational contribution of RWE to that adjusted net income target. Is that clear?

That is.

Okay. And then to the German market, I think it was referring to an interview by Rolf Martin Schmitz, the CEO. This was not in RWE assumption. It -- he was citing a study by German Research Institute, a very well known respectable one, Fraunhofer institute. And they were coming up with the -- with one scenario where power demand could go up to the number you mentioned here in the call. And the logic behind it is if Germany also wants to reach the emission reduction target in the transportation and heating sector, the only way to do that is via electrification. And currently, there's a discussion in Germany ongoing that the entire burden is currently on the electricity demand. So with all the EEG levies and so on and -- especially in heating based on gas and oil, but also on transport, there is not such levy. So there is a discussion whether the EEG and all the subsidization on renewables should be splitted among all sectors and not only on the energy sector, and I think that was what the interview was about.

Just one quick follow-up on the second point. In terms of policy or what the candidates to do election in Germany are saying. Is there anything concrete or is it still at a debate stage where experts are discussing?

No. Maybe a personal comment, I don't expect that energy policy but also environmental policy will be among top three to five agenda items for the federal election. I think we have currently other topics. So they all are currently writing their programs, but it's more -- a much more expert discussion now and not a very emotional heated discussion in the public, which I think is also very helpful doing the -- and find the right solution.

The next question is from John Musk of RBC. Please go ahead.

First question would be on the provisions and the movement of the benefit that you saw, I think, was about €350 million. Can you just remind us of the sensitivity of your provisions to movements in interest rates pensions, both from a pensions and the remaining nuclear provisions? And then, also, what is the best relevant benchmark for us to look at to try and try going forward? And then secondly, quite a simple one, and I'm looking at very long answer, but is there any update on the [indiscernible] of fuel tax position?

Thank you, John. Last one is very easy. No, there is no update. We are still waiting for the ruling of the constitutional court, but we don't have any insights when that will happen. So expectation is still this year, could be any time. On the provisions, so it works like that. In those quarters where we don't submit the CO2 certificate, so in quarter one, thee and four, you see that we have a burden in EBITDA for CO2 emissions for provisioning them. So there you see the reversal in the bridge item, which we call delta [indiscernible] and non-cash items. In Q2, when we hand them into the regulator, you see working capital dropping by the €650 million, €700 million, but also the utilization of provisions for this item jump into the €650 million. Over the course of the year, the utilization of provisions for CO2 certificates is more or less zero, because production volume is stable and we have set on a yearly basis more or less unchanged. On the sensitivity side, 10 basis points in nuclear provisions. It's around €50 million. And on the pension side, the gross effect, so 10 basis points is equivalent to €200 million for the liability side alone, but usually given our asset investment here, we also see movements on the asset side. The numbers I provided are for RWE stand-alones with the €200 million on the pension liability side when we see a 10 basis point movement.

Yes. So I guess, in Q1, you're looking at somewhere between 10 and 20 basis points movement in the mark-to-market that you've done?

Yes, more to the 10 and to the 20. We had a very good result in, on the pension asset management side.

The next question is from Lueder Schumacher of SocGen.

Two questions from me. The first one is on EU state aid approval. You have to transfer rather big amounts of money by the 1st of July. Now before this can take place, you need EU state aid approval. The law has to come into force and the contracts need to be signed. So is there any update on when we can expect the, starting one of these events, EU state aid approval? I would have thought that given the importance and how near we are to the time of actually making these payments, you should be in quite frequent discussions with Brussels. And the second one is something on the European Power division. You mentioned that the income from asset optimization has been rather large in Q1. Could you quantify this, how much was in Q1 this year compared to last year?

Yes. Thanks Lueder for the question. We will not give you a detailed breakdown of the profit contribution, but the number I can provide it was €50 million more than in the respective quarter in last year. The EU state approval, I mean, we are not in constant contact of this process on this topic because it's a topic of the German government. So the Ministry of Economic Affairs is on top of the case. I mean, we are in contact with them. They are in regular contact with Brussels, and they confirmed that they expect state approval to come in due course. And the contracts are all finalized. So they will be signed immediately after state aid approval has been granted.

Is that okay, Lueder?

On the first one, yes. So on the second one, I would have thought in due course can't be a very satisfactory answer, right? Bearing might be important with rather huge nature of the cash flow?

I think everybody is aware in Brussels and Berlin, and they are working on getting the act together. There is little experience we have on the topic, right?

The next question is from Mark Lewis of Barclays. Please go ahead.

Two questions also from me. Firstly, with sort of entering a period now where we might get some meaningful reform of the EU EPS with the proposal that was put forward by the Commission and now the -- both the parliament and the European Council is suggesting a more radical reform. Are you able or willing to share with us your sensitivity -- the sensitivity of your portfolio to higher comp prices, I don't know, a one-year row or a five-year row increase in the carbon price? What does that do to your operating portfolio on the generation side? And would you also -- given that we're coming from the period where CO2 prices have been very flat for the last three or four years, would it change anything in your hedging strategy if -- it's probably still a premature question at this stage, but with -- if within 12 months time, you started seeing CO2 prices moving up as a result of that reform, would that potentially change anything in your hedging strategy? And the second question just relates to German politics again. We had the result yesterday in North Rhine-Westphalia. Peoples expectations about the next government and potential coalitions maybe starting to change. Do you think there is any difference between outcomes in terms of implementation of the Climate Action Plan between the current configuration of a grand coalition between the CDU and the SPD on the one hand or potentially a CDU-FDP-Green Party coalition? Or do you thing -- actually, it doesn't really matter that policy will be implemented indefinitely on that score?

Yes. Thanks Mark for the questions. Please accept that I will not start political speculation. So let's wait until we see the federal election and then what their program looks like and then we can give you our assessment on the content side. But now speculating what potential different coalition would do is not something I'd like to enter into. On the CO2 side, our CO2 position until the 2020 is financially neutral. So we have already hedged our position. And we will take the decision what we're going to take with the next period from 2021 onwards when we have all the details available. So any short-term price movements would potentially not change our hedging policy because we are financially already hedged on the CO2 side.

The next question is from José López of Millenium. José López: I have a question on biomass. Could you give us an update on what your latest thinking is in respect of this technology? I think I noted that the Georgia Biomass pelleting plant was spun-off to Innogy. You retained the generation. How do you see your footprint in this area? Do you think this is something you might seek to exit? Or will you be looking to grow a bit more in this technology?

Yes, thanks. As you rightly pointed out, production plant is with Innogy Georgia Biomass. What we do is, I mean, of course, we are involved in biomass trading and also securing the supply for our own biomass demand. And we were granted subsidies from the Dutch government to coal fire biomass in our Netherlands coal-fired power station. And they are [indiscernible] expect by, payment by the government. We will, of course, invest into this business because it improves profitability of the plant and also diversifies the fuel mix. But we have currently no plans to invest further into this field other than we get another backup payment or capacity, subsidy payment by governments who wants it.

The next question is from Deepa Venkateswaran of Bernstein.

I have two follow-up questions. One is, could you provide an outlook for where you expect your stand-alone net debt position by the year-end, considering a few positives like the energy cash flow and the pension payment, but also loss of hybrid credit as you don't refill, as you basically don't replace the hybrids? Second question really is a follow-up to the previous one on carbon. As you mentioned that you're financially neutral to rising carbon price environment, can you just explain how much CO2 allowances you actually have in your books and what price are they reflected in? And should you need to mark-to-market, where will we see that in the EBITDA at some point?

Yes, Deepa. Thanks for the question. Net debt, we expect net debt, I mean, you're seeing the number, last year it was €6.9 billion, now it is around €7 billion RWE stand-alone. We're going to lose around €700 million hybrid credit, but we still expect to slightly overcompensate that and will end with net debt below the €7 billion we have seen end of last quarter. And on the CO2 side, these CO2 certificates are not mark-to-market. You're going to see the effect in the EBITDA when we actually produce the power. So it is part of the generation margin because it's the hedge position and not a speculated position.

So just to clarify, so it's now held at cost. So as you actually produce the power in the next three years that basically enters your cost of goods. But if it's held at cost and presumably if it's been bought, because you moved to this strategy of hedging long time back, would that not mean that there is a negative implication on the EBITDA, or am I missing something?

No. I mean, what, I mean, the question is then at what price levels have we actually bought the CO2 certificates and could we have bought them cheaper, then it's an opportunity loss, yes. But we have the CO2 position already flexible -- already hedged. So it will, as you said, enter the cost of goods when we actually produce. But where you see -- but this is a temporary effect, where you see effect is in the margining, yes. So variation margin, because there we do the mark-to-market, but not in the P&L.

The next question is from Nick Ashworth of Morgan Stanley. Please go ahead.

A question about the dividend. I guess by your own admission, you say that Q1 has been a good start to the year. European Power EBITDA is a little bit ahead of, I think, expectation. Sales & Trading has started well. I know it's very early in the year. It feels like cash flow EBITDA can come towards the top end of expectations for the full year. In a scenario where it does, does that mean anything for your dividend? Or you still -- but you still be committing to pay €0.50 dividend even if you did much, much better than you expected in the year? Presumably, the dividend policy has been set around a much lower EBITDA, cash flow framework to be able to paid even if you were at the bottom end of your guidance. You're at top end of guidance range, what does that mean to the dividend? And if it means that the dividend doesn't move, what does that mean for the cash flow that you're generating? You don't need to -- doesn't feel like you need to lower net debt from here. Would that be a reason to keep the additional cash flow?

Thanks, Nick, I mean, as we said, we had a positive start, and we are all happy about that. And on the dividend side, I mean, that's much too early now to speculate. We said we're going to set the dividend policy also looking not only at the current year but also to the mid-term future. And as you know that still we have not reached the level of realized power prices we have at current market price. So we're going to see that in 2018. So for the dividend decision also for '17 and '18, we want to have a much clearer picture on also how the budget and the planning looks like for 2018, because we said we want to stable dividend policy and we don't want to see reduction in dividends for '18. So we're going to smooth that out over the mid-term period. So it's now too early after a very good first quarter to start the speculation. We might update that when we have done our plan for the next year, maybe in the first quarter of this year.

And then planning, therefore, take place in the sort of late Q3?

Yes. I mean, usually the planning cycle is finalized in November -- October, November.

Thank you Nick. Are there more questions?

At the moment, there are no further questions. [Operator Instructions] There are no more questions.

Okay. Then I would say we close the call for today. As you know, the IR department is available for further follow-ups, and we hope to see you soon on the road. Thank you very much.