E.on Se · XETR:EOAN
E.on — Non-Deal Roadshow (May 2001)
34 slides from E.on's roadshow presentation, May 29, 2001
Slide 1: E.ON AG Roadshow - Madrid, Spain
E.ON AG Roadshow - Madrid, Spain May 29, 2001 Page 1
Slide 2: E.ON Group - Structure
E.ON Group - Structure E.ON AG Energy Non-core activities E.ON Energie 100 % Oil VEBA Oel 100 % – Electricity Chemicals • Generation Degussa 64.6 % • Trading Real Estate • Transmission/ Viterra 100 % distribution Other Activities • Supply VIAG Telecom 100 % – Gas E.ON Telecom 100 % Stinnes 65.5 % –
Slide 3: E.ON Group - Strategy
E.ON Group - Strategy Expand to become a top global integrated energy service provider via focus and growth: • Concentrate exclusively on core energy services business • Pursue accretive acquisitions to cement leading position in Europe and to establish solid position worldwide • Dispose of non-util
Slide 4: E.ON Group - Implementing E.ON's global growth strategy
E.ON Group - Implementing E.ON‘s global growth strategy Growth Outside Europe • Acquire integrated utilities in North America (eg. LG&E) • Selectively engage in South America Broad expansion in • Expand around Germany (eg. majority in Sydkraft) Europe • Establish European-wide wholesale presence • E
Slide 5: E.ON Energie - Second-largest utility in Germany
E.ON Energie - Second-largest utility in Germany SCHLESWAG EWE e.dis Avacon EMR PESAG EAM TEAG ÜWU* EVO* Majority participations IAW* Minority participations Includes only participations => 25 % * Merger planned to form E.ON Bayern in 2001 Page 5
Slide 6: E.ON Energie - Strong market share in gas distribution in Germany
E.ON Energie - Strong market share in gas distribution in Germany 2000 (pro forma) SCHLESWAG Turnover Sales volume (mill €) (bn kWh) Heingas EWE EWE 1,594 72.5 AVACON • The leading local distribution Gelsenwasser company in Germany* Thüga • Further participations in Italy, Austria, Czech, Hungary, L
Slide 7: E.ON Energie - Largest privately-owned water operator in Germany
E.ON Energie - Largest privately-owned water operator in Germany 2000 (pro forma) Turnover Sales volume (mill €) (mill m3) swb 217 259 T T • 15 % market share in Germany* T • Broad experience in drinking N-ERGIE T and sewage water T REWAG • German water market: € 25 bn T European water market: € 80
Slide 8: E.ON Energie - Leading player in European power trading
E.ON Energie - Leading player in European power trading kWh in billions 98 • One of the largest European wholesale traders • Presence at all important European Exchanges 46 • Market maker at EEX 27 • Trading secures favorable procurement conditions for distribution partners 1999 2000 2001 (plan) Pag
Slide 9: E.ON Energie - Strong international expansion
E.ON Energie - Strong international expansion Graninge Lenenergo Viking Cable E.ON Latvijas Eesti Energia RAO "EES Rossii" Scandinavia Gaze Latvenergo EV3 I/S Sydkraft RAO "Gazprom" Baltic Lietuvos Energija E.ON Benelux Cable Jantarenergo E.ON Polska Poland (9 Distribution Comp., PSE and PGNiG) Pole
Slide 10: The UK - A key European market
The UK - A key European market • Third largest European electricity market (~ 300 TWh sales) • Leading country in energy liberalization • Value creating opportunities exist for – flexible portfolio generators – experienced asset backed traders – efficient operators of distribution assets – innovativ
Slide 11: Powergen: UK excellence
Powergen: UK excellence • World-class, flexible and diversified generation portfolio Assets • Efficient distribution assets Trading • Integrated trading strategy • Leading market player Retail • Targeted marketing strategy with strong brand • More than 3 million customer accounts - and growing Page
Slide 12: The US - World's largest power market
The US - World‘s largest power market • Larger than total European electricity market • Offers higher growth and return potential than Europe • Integrated utility as the accepted business model • Value creation opportunities from introducing European best practices • Further opportunities arising fr
Slide 13: Midwest an attractive region within the US power market
Midwest an attractive region within the US power market North American Electricity Pools(1) • Midwest(2) with around 30% of US electricity demand • Crossroads of major energy flows, MAIN well interconnected and with Detroit good fuel supply options New York Chicago MAAC Philadelphia • Heavily indust
Slide 14: LG&E: US excellence
LG&E: US excellence • Reliable, low cost generation assets Generation • Opportunities for off-system sales at attractive rates • Top quartile regional efficiency ranking in distribution - and improving Distribution • High serivde levels and customer satisfaction • (#1 JD Power survey1)) • Favourable
Slide 15: Powergen: An integrated UK and US utility
Powergen: An integrated UK and US utility Powergen GB USA Generation 34.0 TWh(1) 45.3 TWh(5) 7,836 MW capacity(2) 8,263 MW caoacity(3) Distribution 67,000 line km covering 16.000 km² 39,000 line km(4) covering 70.000 km² Vertrieb 3.1 mn customer accounts 1.2 mn customer accounts Gesamtabsatz 31.6 TW
Slide 16: E.ON Group - The world's largest investor-owned electricity and gas utility
E.ON Group - The world‘s largest investor-owned electricity and gas utility Consolidated Electricity Sales (TWh) Electricity and Gas Customers (1) (mn.) EDF 464 EDF 47 E.ON/Powergen 323 E.ON/Powergen 30 Tokyo Electric 274 ENEL 30 ENEL 244 Tokyo Electric 26 E.ON 239 E.ON 25 AEP 231 Endesa 22 RWE 212
Slide 17: Summary terms of the pre-conditional offer
Summary terms of the pre-conditional offer • 765 p in cash for each Powergen share – equity value of £ 5,126 billion or € 8,169 billion – enterprise value of £ 9,593 billion or € 15,289billion(1) • Pre-conditional offer – regulatory approvals expected early 2002 – formal offer to be launched thereaf
Slide 18: Transaction timing
Transaction timing Process Milestones Expected Timing • Pre-conditional offer • April 2001 • Pre-conditions met • early 2002 – E.ON registered under PUHCA – Regulatory clearances (OFGEM; SEC; FERC; PSC of Kentucky and Virginia) – Anti-Trust clearance (EU, HSR) • Launch of offer • early 2002 • Closin
Slide 19: E.ON: From European to Global powerhouse
E.ON: From European to Global powerhouse • Creates world‘s largest investor-owned electricity and gas utility – leading scale positions in all top three European markets (Western Europe(1), Scandinavia, UK) – substantial growth opportunities in the US • Ability to deliver on best-in-class aspiration
Slide 20: Chemicals - Structure by division
Chemicals - Structure by division Degussa Health Construction Fine & Performance Coatings & Specialty & Chemicals Industrial Chemicals Advanced Polymers Nutrition Chemicals Fillers Flavors & Germany Fine Chemicals Superabsorbents Coatings & High Fruit Systems Colorants Performance Polymers BioActive
Slide 21: Chemicals - Degussa: worldwide leading market position in specialty chemicals
Chemicals - Degussa: worldwide leading market position in specialty chemicals Sales 2000; € in billions 16.9 10.3 8.9 8.1 7.6 7.4 6.9 5.2 3.5 1.1 ICI nza SC * ia y nt M s les ssa lva aa od DS ria rc u a Lo gu &H So Rh Cib Cla He De hm Ro * excluding precious metal trading Page 21
Slide 22: Chemicals - Leading market positions
Chemicals - Leading market positions Market positions1 of core business activities Leading market position Health & Nutrition Global market position (No. 1-3) in over 85% of core – Lecithin No. 2 businesses2 – Methionine No. 1 – Texturant Systems No. 2 Construction Chemicals 15% – Chemical products
Slide 23: Chemicals - Strategy
Chemicals - Strategy ❑ Focus systematically on high-growth and high-margin specialty segments by rapidly implementing disposal strategy ❑ Sustain above-average growth and selectively expand core business areas ❑ Enlarge global footpring, particularly in Asia and Latin America ❑ Enhance value on ongo
Slide 24: Chemicals - Lasting earnings improvements
Chemicals - Lasting earnings improvements Synergies ❑ With 2 years: € 50 million anually from merger of Degussa-Hüls and SKW; majority to be realized by year-end 2001 ❑ € 20 million anually from acquisition of Laporte Restructuring ❑ With 3 years: € 250 million anually ❑ Key company-wide catalyst: b
Slide 25: Chemicals - Systematic focus on specialty chemicals
Chemicals - Systematic focus on specialty chemicals Divestments of non-core activities Sales in 2000 divested Status in billion € Reorganisation: AWD.pharma, Health ASTA Medica 0.8 Products, Oncology, Zentaris dmc2 2.6 þ sold to OM Group (USA) Phenolchemie 1.2 þ sold to INEOS Group (GB) Degussa Dent
Slide 26: E.ON Group - Divestment of non-core assets ahead of plan
E.ON Group - Divestment of non-core assets ahead of plan € in millions Stake Sales Proceeds Comments % 2000 (equity value) Listed companies Degussa 64.6 20,139 - Stinnes 66 11,981 - MEMC 72 944 - Schmalbach-Lubeca 49 1,891 - divestment initiated Gerresheimer Glas 71 836* 215 divested Other companies
Slide 27: E.ON Group - Cost Management
E.ON Group - Cost Management € in millions realized realized realised planned 1993 - 1999 2000 1993 - 2000 2001 - 2003 Electricity 1,060 430 1,490 1,020 Oil 308 32 340 60 Chemicals 796* 80 876 380 Holding - - - 50 Total 2,164 542 2,706 1,510 *Only Degussa-Hüls,without SKW Trostberg and Goldschmidt P
Slide 28: E.ON Group - A leading global powerhouse
E.ON Group - A leading global powerhouse • Focused utility business • Global leadership position in power • Poised for future growth in US and Europe • Best-in-class skills across value chain • High quality international management team Page 28
Slide 29: Back-up Charts
Back-up Charts Page 29
Slide 30: E.ON Energie - Price comparison standard-rate customers (examples)
E.ON Energie - Price comparison standard-rate customers (examples) in Pf/kWh 2000 1999 +/- % BEWAG 28.00 28.00 0 EnBW Regional 26.01 26.01 0 E.ON 27.29 24.89 +9.64 HEW 27.88 27.88 0 RWE 25.60 27.44 -6.71 Yello 24.70 24.70 0 * Households with a consumption of 4000 kWh/year; end-consumer prices (inclu
Slide 31: New agreement for electricity transmission – Examples for point of connection fees
New agreement for electricity transmission – Examples for point of connection fees for customers, January 2001 Standard-rate customers Medium-sized special rate Large industrial customers Largest customers (households) customers (manufacturing) (manufacturing) Grid access fee: This covers ca. 13.0 P
Slide 32: German industrial power prices
German industrial power prices in Pf/kWh 13.000 11.249 11.275 12.499 12.457 12.000 11.244 11.262 11.262 11.262 11.257 11.248 11.236 11.236 11.236 11.000 10.000 9.000 8.000 7.000 6.000 5.000 4.000 3.000 2.000 1.000 0 Apr 00 May 00 Jun 00 Jul 00 Aug 00 Sep 00 Oct 00 Nov 00 Dec 00 Jan 01 Feb 01 Mar 01
Slide 33: E.ON Energie - Reduction of installed generation capacity (1)
E.ON Energie - Reduction of installed generation capacity (1) (2001-2003) Shutdowns 2,279 MW Realized - Offleben C 280 MW - Rauxel 2 164 MW - Westerholt 1 138 MW - Westerholt 2 138 MW - Stade 630 MW - Arzberg 5 104 MW - Arzberg 7 121 MW - Schwandorf D 292 MW - Franken II B1 206 MW 206 MW - Franken I
Slide 34: E.ON Energie - Reduction of installed generation capacity (2)
E.ON Energie - Reduction of installed generation capacity (2) (2001-2003) Realized Total reduction of installed capacity 3,861 MW 1,493 MW Shutdown of assets currently in cold reserve 293 MW - Aschaffenburg 21 150 MW 150 MW - Aschaffenburg 31 143 MW 143 MW Continuation of cold reserve 755 MW - Irsch