E.on Se · XETR:EOAN
E.on — Non-Deal Roadshow (June 2001)
31 slides from E.on's roadshow presentation, Jun 18, 2001
Slide 1: E.ON AG Benelux-Roadshow
E.ON AG Benelux-Roadshow June 18, 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% – Water K
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: 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 b
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 (European Energy Exchange) 27 • Trading secures favorable procurement conditions for distribution partner
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 service 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 UK USA Asset Management Generation 34.0 TWh(1) 45.3 TWh(5) 7,836 MW capacity(2) 8,263 MW capacity(3) Distribution 67,000 line km covering 16,000 km² 39,000 line km(4) covering 70,000 km² Energy Retail 3.1 mn customer accounts 1.2 mn customer account
Slide 16: 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) (1) Electricity and Gas Customers (mn.) (1) (2) 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
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 € 15,289 billion(1) • Pre-conditional offer – regulatory approvals expected early 2002 – formal offer to be launched therea
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 - 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 22: 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 footprint, particularly in Asia and Latin America ❑ Enhance value on ongo
Slide 23: Chemicals - Systematic focus on specialty chemicals
Chemicals - Systematic focus on specialty chemicals Divestments of non-core activities Sales in 2000 divested Status in billion € Reorganization: AWD.pharma, Health ASTA Medica 0.8 Products, Oncology, Zentaris (IPO) dmc2 2.6 þ Sold to OM Group (USA) Phenolchemie 1.2 þ Sold to INEOS Group (GB) Deguss
Slide 24: 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 8361 215 Divested Other companies
Slide 25: E.ON Group - Cost Management
E.ON Group - Cost Management € in millions realized realized realized 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 26: E.ON Group - ROCE by Segment
E.ON Group - ROCE by Segment € in millions (pro forma) EBITA Capital Employed ROCE % Cost of 2000 1999 2000 1999 2000 1999 Capital* % Electricity 1,850 3,044 17,151 17,165 10.8 17.7 11.0 Oil 541 53 3,612 2,475 15.0 2.2 10.6 Chemicals 1,201 915 11,727 11,010 10.2 8.3 12.0 Real Estate 298 269 2,576 2,
Slide 27: Group Performance (1)
E.ON Group - Group Performance (1) First Quarter € in millions 2001 Pro forma +/- % 2000 Group external sales 22,719 22,391 +1 Group internal operating profit 949 693 +37 Energy 490 524 -6 Oil 80 46 +74 Chemicals 120 195 -38 Other Activites 89 -17 - E.ON AG/Other/Consolidation 170 -55 - Page 27
Slide 28: Group Performance (2)
E.ON Group - Group Performance (2) 2001 Pro forma +/- % First Quarter 2000 € in millions Group internal operating profit 949 693 +37 Net book gains 111 4,408 -97 Restructuring expenses and cost- management -21 -46 +54 Other non-operating earnings -57 1 - Foreign E&P taxes 117 110 +6 Pretax income 1,
Slide 29: Outlook 2001
E.ON Group - Outlook 2001 •Full year Group internal operating profit to increase markedly in 2001. However, the rate of increase in internal operating profit in the first quarter will not be sustained for the full year. - Electricity: Slightly above last year‘s level – Oil: On par with previous year
Slide 30: 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 30
Slide 31: This document does not constitute an offer to purchase
THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO PURCHASE OR A SOLICITATION OF AN OFFER TO SELL ANY SECURITIES. IF AND WHEN E.ON COMMENCES ITS OFFER FOR ORDINARY SHARES OR ANY OTHER SECURITIES OF POWERGEN, IT WILL FILE A TENDER OFFER STATEMENT WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND POWERG