E.on Se · XETR:EOAN
E.on — Investor Day (March 2020)
101 slides from E.on's investor day presentation, Mar 25, 2020
Slide 1: Capital Markets Day
Capital Markets Day 25th March 2020
Slide 2: Business resilience in an economic downturn
Business resilience in an economic downturn
Slide 3: E.ON is the largest operator of system critical infrastructure
E.ON is the largest operator of system critical infrastructure – our responsibility towards society We will ensure security of supply for our customers We have taken effective measures across Europe under all circumstances 24/7 availability of energy is essential for stability in ✓ Effective crisis
Slide 4: Our portfolio is resilient to economic cycles
Our portfolio is resilient to economic cycles Energy Networks: Exposure to volume risk can be Customer Solutions: Only ~10-15% of EBIT from recovered in following years recession-exposed B2B commodity customers Schematic illustration of unutilized revenue cap EBIT2 split by customer segment € bn All
Slide 5: E.ON is well prepared to weather even a severe recession
E.ON is well prepared to weather even a severe recession Recession scenario case High level impact assessment on E.ON Shape of Energy Negligible impact in total recession period from volume risk Networks scenario Customer • Energy volumes (B2B) Solutions • Bad debt February 2020 End of recession • T
Slide 6: Strategic Update
Strategic Update
Slide 7: Why invest in E.ON?
Why invest in E.ON? 1 We commit to a sustainable dividend per share growth of up to 5% annually until 2022 and further growth beyond Dividend growth 2 We are the green investment opportunity and we enable the energy transition Customer centric energy infrastructure 3 We focus on customer centric ene
Slide 8: Why invest in E.ON?
Why invest in E.ON? Dividend growth Customer centric energy infrastructure Sustainability Performance 8
Slide 9: Net zero is the new normal – E.ON is driving carbon reduction
Net zero is the new normal – E.ON is driving carbon reduction Global challenges E.ON’s contribution Focus SDGs5 IPCC1 long term goal to limit global Avoided emissions together with our clients warming to 1.5°C 2019: >100m tons CO2 German greenhouse gas emissions to be cut One out of five renewable b
Slide 10: Sustainability is more than carbon reduction
Sustainability is more than carbon reduction Decarbonization 90% increase of electricity share in total energy demand until 20501 in Europe Digitalization Increasing system complexity only Customer manageable through digital Decentralization competencies and solutions Already today >90% of European
Slide 11: Decarbonization means deep electrification
Decarbonization means deep electrification European1 energy demand 2015 vs. 2050… … with huge impact on energy infrastructure TWh Increase of electricity demand (+90%) ~12,500 • Deep electrification of different sectors and -40% ~7,000 decentral generation creates the need for substantial grid inves
Slide 12: Electrification means decentralization and local optimization
Electrification means decentralization and local optimization Decentral storage Decentral renewable generation Decentral renewable generation Core energy Innovative E-mobility Smart home infrastructure solutions H2 >90% of European renewables Decentral renewable generation are connected to distribut
Slide 13: Decentralization means digitalization and efficiency potential
Decentralization means digitalization and efficiency potential The complexity within DSOs is increasing ... Decentralization drives system complexity E.ON provides digital solutions to capitalize on it Energy Management System Regional Energy Market EnergieMonitor & Klima-Navi Customer Smart Home Tr
Slide 14: Why invest in E.ON?
Why invest in E.ON? Dividend growth Customer centric energy infrastructure Sustainability Performance 14
Slide 15: E.ON transformed into Europe’s energy infrastructure powerhouse
E.ON transformed into Europe’s energy infrastructure powerhouse E.ON’s strategy implementation accelerated by innogy takeover Long-term 2x 2x ~80% Integration ~€740m energy infrastructure Regulated Asset Base1 customer accounts regulated earnings bundling of synergies delivery of annual net substitu
Slide 16: Infrastructure is at the heart of E.ON’s capital allocation
Infrastructure is at the heart of E.ON’s capital allocation ~10% Energy Retail Customer Solutions1 retail2 investments4 Decentral energy infrastructure3 ~90% Infrastructure Energy Networks1 Regulated energy networks investments4 1. IFRS segments used in external reporting 2. Includes Energy Sales an
Slide 17: Energy transition driving multi-decade investment opportunities
Energy transition driving multi-decade investment opportunities Industry investments in German power distribution networks excluding Green Deal upside € bn Drivers 6.7 4.7 2.5 2010 2009 2020 2030 2050 Source: Historic values: Bundesnetzagentur Monitoringbericht 2019. Future outlook: dena-Leitstudie
Slide 18: E.ON is the leading energy network company in Northern and Central Europe
E.ON is the leading energy network company in Northern and Central Europe E.ON Regulated Asset Base (RAB) – regional split € bn Total RAB1, 2 33.2 Sweden Germany CEE2 &Turkey2 Power RAB Gas RAB 3.8 21.9 7.6 1. RAB is the value of all distribution assets determined by the regulator. In general, RABs
Slide 19: Long-term RAB growth with further upside potential
Long-term RAB growth with further upside potential E.ON Regulated Asset Base1 growth € bn Power 33.2 3-5% • Multi-decade growth potential CAGR2 stemming from mega-trends Gas Power 27.7 • Optimizing our existing gas asset base with limited investment needs • Future growth option from hydrogen Gas 5.5
Slide 20: Gas distribution with stable earnings and limited capex
Gas distribution with stable earnings and limited capex Gas activities closely coupled with power business Limited capex spent on gas ~90% of German gas network business is ~5% of Group capex is spent 1 linked to electricity concessions on our gas business The role of gas in German heating market2 F
Slide 21: Four years of regulatory stability
Four years of regulatory stability Regulatory periods per country 2020 2021 2022 2023 2024 2025 2026 2027 2028 Germany (Gas) Slovakia1 Turkey Poland Czech Republic1 Hungary Romania 70%2 of the Energy Networks Germany (Power) EBIT is highly visible until 2024 Sweden 1. Length of upcoming regulatory p
Slide 22: Exemplary earnings components beyond allowed return
Exemplary earnings components beyond allowed return Opex efficiencies Regulatory cost Actual opex vs. allowed opex recognition Total Allowed RAB growth = regulated return Capex efficiencies Outperformance of standard Special incentives E.g. reliability and earnings prices set by regulator network lo
Slide 23: E.ON contributes to innovative and fair regulatory solutions
E.ON contributes to innovative and fair regulatory solutions Examples of newly introduced regulatory solutions Present Germany 2018/2019 Sweden 2019/2020 Enhanced investment incentive Carry-over granted in line with high due to yearly true-up of RAB investment level Priority for future solutions Fut
Slide 24: Leveraging strong partnerships and core competencies to drive additional businesses
Leveraging strong partnerships and core competencies to drive additional businesses Long-term partnerships with municipalities … … create a competitive edge for additional businesses Technical grid services Smart meters Non-concession- Concession- based RAB based RAB e.g. O&M e.g. installation ~1/3
Slide 25: Earnings growth from reducing carbon emissions via decentral energy infrastructure
Earnings growth from reducing carbon emissions via decentral energy infrastructure Low temperature heating Large B2B solutions/district and cooling grids heating grids Top 2 E.g. ectogrid: zero emission On-site generation solutions energy hybrid system with up Average contract duration: 15-40 years
Slide 26: Continuous customer growth outside the UK
Continuous customer growth outside the UK B2C Customer accounts (m) Creating a future proof business 49.3 49.2 Loyalty through Scaling bundles, value-added services and Bundling referral programs 13.0 ~380k 13.4 >150k bundle contracts in Germany and >220k bundles in Czech Republic Customer Dig
Slide 27: Leveraging Europe’s largest customer base by additional offerings
Leveraging Europe’s largest customer base by additional offerings Attractive cross-selling opportunities at minimal capex Units installed ~20% CAGR1 Home Heating • Leading European position in installing and 50k maintaining residential heating solutions • >1.1m active maintenance service contracts 2
Slide 28: Why invest in E.ON?
Why invest in E.ON? Dividend growth Customer centric energy infrastructure Sustainability Performance 28
Slide 29: Performance culture is part of our DNA
Performance culture is part of our DNA Transaction related synergies npower & E.ON customers migrated Operational excellence onto new platform E.ONnext ✓ Synergy delivery on track EBIT1 development Continuous improvement GBP m ~100m ✓ 5% achieved in 2019 Digitalization & innovation 2019 2022 2023 >2
Slide 30: Synergy delivery fully on track
Synergy delivery fully on track Estimated transaction related net synergies1 of ~€740m Synergy delivery by division ~100% 27% ~45% 53% ~20% 5% ✓ 20% 2019 2020 2021 2022 1. Start of voluntary 1. Full integration of 1. Synergies in Energy Customer Solutions leave program headquarter Networks Energy Ne
Slide 31: Renewal of IT architecture to drive operational excellence in Customer Solutions
Renewal of IT architecture to drive operational excellence in Customer Solutions Germany: Digital Attacker UK: Migration to new platform ensures higher profitability Continuous ramp up of contracts to new Step 1 Step 2 platform (schematic) Migration of npower’s B2C and Migration of E.ON’s B2C and SM
Slide 32: E.ON’s performance culture adds sustainable value to businesses and customers
E.ON’s performance culture adds sustainable value to businesses and customers German power network efficiency scores Sweden power network efficiency scores >€600m additional revenues 100% in regulatory period1 E.ON grids 100% Very efficient 85% 95% Industry average 94% Efficient 70% 8/9 E.ON grids 1
Slide 33: We commit to annually grow the dividend per share by up to 5%
We commit to annually grow the dividend per share by up to 5% Dividend per share (DPS) €0.43 €0.46 €0.30 €0.21 Growth beyond 2016 ✓ 2017 ✓ 2018 ✓ 2019 ✓ 2020 2021 2022 33
Slide 34: Financial Update
Financial Update
Slide 35: We commit to annually grow the dividend per share by up to 5%
We commit to annually grow the dividend per share by up to 5% Dividend per share (DPS) €0.43 €0.46 €0.30 €0.21 Growth beyond 2016 ✓ 2017 ✓ 2018 ✓ 2019 ✓ 2020 2021 2022 35
Slide 36: We commit to our 2020-2022 delivery plan
We commit to our 2020-2022 delivery plan Dividend per share (DPS) growth up to 5% p.a. EBIT1 growth Group EPS1 growth Group 7-9% CAGR 10-15% CAGR cash conversion Average strong Capital structure with rate2of 95% BBB/Baa rating 1. Adjusted for non operating effects; pre-economic cycle effects 2. Excl
Slide 37: Strict capital allocation framework leads to sound investment profile
Strict capital allocation framework leads to sound investment profile Sustainability focus Return framework Capital allocation in line with business priorities Sustainability criteria: Hurdle rate composition: Indicative hurdle rates2: ✓ Enable energy transition WACC (country & technology specific)
Slide 38: E.ON allocates ~75% of investments to Energy Networks
E.ON allocates ~75% of investments to Energy Networks Investments 2020 Investments 2020-2022 € bn € bn ~90%2 ~90%2 infrastructure infrastructure ~4.51 ~131 Energy Networks Customer Solutions Other3 1. Cash effective investments including Corporate Functions & Other and Non-Core, pre-economic cycle e
Slide 39: Investments with strong focus on infrastructure
Investments with strong focus on infrastructure Energy Networks 2020-2022 Customer Solutions 2020-2022 € bn € bn 100% ~65% ~9.71 infrastructure ~2.71 infrastructure B2B Solutions IT driven retail investments City Energy Solutions New Solutions Power Gas Other UK smart meter roll-out E-mobility 1. Ca
Slide 40: Attractive Group earnings growth
Attractive Group earnings growth EBITDA1 EBIT1 Outlook1 € bn € bn CAGR 3-4% 7.1-7.3 6.9 0.6 1.1 4.1 3.9-4.1 EBITDA 0.5 0.4 5.4 3.6 7-9% EBIT 2019 2020 2019 2020 2020-2022 pro forma pro forma Guidance: Energy Networks Customer Solutions Corporate Functions & Other Non-Core 1. Adjusted for non operati
Slide 41: Mid-term growth in Energy Networks earnings backed by organic RAB growth
Mid-term growth in Energy Networks earnings backed by organic RAB growth EBITDA1 EBIT1 Outlook1 € bn € bn 5.4 5.2-5.4 1.0 3.6 3.3-3.5 0.7 0.6 0.5 3.7 2.4 2019 2020 2019 2020 2020-2022 pro forma pro forma Guidance: Germany Sweden CEE & Turkey 1. Adjusted for non operating effects; pre-economic cycle
Slide 42: Customer Solutions earnings growth driven by digitalization and UK turnaround
Customer Solutions earnings growth driven by digitalization and UK turnaround EBITDA1,2 EBIT1 Outlook1 € bn € bn 1.1-1.3 1.1 0.5 0.5-0.7 0.3 0.1 0.2 Decentral energy 0.1 infrastructure 0.6 ~30% 0.5 2019 2020 -0.2 2020 2020-2022 pro forma 2019 pro forma Guidance: Germany UK Benelux Other 1. Adjusted
Slide 43: Strong EPS growth of 10-15%
Strong EPS growth of 10-15% Adjusted Net Income1 Earnings per share1 Outlook1 € bn € CAGR 1.7-1.9 1.6 0.63 0.65-0.73 Payout 10-15% ratio 73% 2019 2020 2019 2020 2020-2022 pro forma pro forma 1. Adjusted for non operating effects; pre-economic cycle effects 43
Slide 44: Significant refinancing benefits over the next three years
Significant refinancing benefits over the next three years ~€8bn bond maturities 2020-20221,2 19.5 € bn Volume % Coupon 1.8 1.4 0.4% 1.5 Refinancing 5.7% 1.2 0.0% benefits 0.8 0.0% until 2022 of up to 0.6 0.7 5.8% 1.9% 6.5% 0.8% ~€200m3 3.2% 6.5% 5.5% Q1 2020 Q2 2020 Q4 20202 Q2 2021 Q3 2021 Q3 2022
Slide 45: Green financing is an integral part of our funding strategy
Green financing is an integral part of our funding strategy Total investments 2020-2022 To finance our investments we have tapped the € bn green bond market … 95% €3.35bn outstanding 4 energy transition investments2 … and intend to issue more: 131 ~€1bn p.a. Revolving credit facility linked to susta
Slide 46: E.ON’s approach to manage Economic Net Debt
E.ON’s approach to manage Economic Net Debt Economic Net Debt € bn 2019 “Beat the • 0% real discount rate floor reached: only upside -8.9 provisions” • Further upside: outperforming provisions by operational excellence “Focus on the • UK pension obligations largely funded -7.2 long end” • Sensitivit
Slide 47: Debt management to bring leverage down
Debt management to bring leverage down Leverage factor1 Selected Economic Net Debt effects 2020-20222 • 95% Cash conversion rate3 Strong BBB/Baa rating target • Working Capital optimization program & 5.7x ARO4 reduction ~+€1bn (ARO reduction: ~€200m already achieved 2019) • Nordstream 1 transfer to
Slide 48: Dividend commitment fully in line with deleveraging
Dividend commitment fully in line with deleveraging EPS1 above DPS growth… …lowers payout ratio… … allowing deleveraging and sustainable dividend growth 5.7x Strong BBB/Baa rating target 73% Payout ratio ~5x 2019 2020 2021 2022 2019 2022 2019 2022 pro forma pro forma pro forma 1. Adjusted for non op
Slide 49: We commit to our 2020-2022 delivery plan
We commit to our 2020-2022 delivery plan Dividend per share (DPS) growth up to 5% p.a. EBIT1 growth Group EPS1 growth Group 7-9% CAGR 10-15% CAGR cash conversion Average strong Capital structure with rate2of 95% BBB/Baa rating 1. Adjusted for non operating effects; pre-economic cycle effects 2. Excl
Slide 50: Investment Highlights
Investment Highlights
Slide 51: Why invest in E.ON?
Why invest in E.ON? 1 We commit to a sustainable dividend per share growth of up to 5% annually until 2022 and further growth beyond Dividend growth 2 We are the green investment opportunity and we enable the energy transition Customer centric energy infrastructure 3 We focus on customer centric ene
Slide 52: Appendix
Appendix
Slide 53: Guidance overview
Guidance overview € bn 2019 pro forma 2020 2020-2022 EBITDA1 6.897 7.1-7.3 3-4% CAGR Energy Networks 5.359 5.2-5.4 Customer Solutions 1.124 1.1-1.3 Non-Core 0.617 0.8-1.0 Corporate Functions & Other -0.203 ~-0.3 EBIT1 4.134 3.9-4.1 7-9% CAGR Energy Networks 3.582 3.3-3.5 Customer Solutions 0.526 0.5
Slide 54: E.ON new segmentation from 2020 onwards
E.ON new segmentation from 2020 onwards IFRS reporting divisions Energy Networks Customer Solutions Corporate Non-Core Functions & DE SWE CEE1 & TR Benelux2 DE UK Other3 PE4 TR Gen5 Other Power grid City Energy Energy Solutions sales and Gas grid (CES) services New Additional businesses B2B Solution
Slide 55: EU Green Deal offers additional business opportunities for E.ON
EU Green Deal offers additional business opportunities for E.ON EU Green Deal Opportunities for E.ON • Climate neutrality by 2050 • Accelerated integration of renewables leads to • At least 50% carbon emission reduction by massive extension of distribution grid 2030, if possible 55%1 • Conversion of
Slide 56: E.ON’s strong ESG profile
E.ON’s strong ESG profile Environmental Social Governance Climate neutrality by 2040 Variety of nationalities, cultures, generations and genders Supervisory (Scope 1 & 2) & by 2050 Diversity Experienced, diverse and independent in management & workforce Board (including Scope 3)1 Avoided emission to
Slide 57: E.ON’s sustainability awards, ratings and rankings
E.ON’s sustainability awards, ratings and rankings CDP Score: B Text 1 Result: AA Text 1 Sector Average: C Overall ESG Score: 3.2 Overall ESG Score = 81 (Leader Group) Text 1 Text 1 Sub Sector Average Multiutilities: 2.8 Relative Position 11 out of 192 Industry Average Utilities: 2.7 E.ON is index m
Slide 58: Building blocks of allowed revenues in Germany
Building blocks of allowed revenues in Germany Schematic illustration for 2019 (power & gas) € bn ~21.2 Gas ~1.1 (New) Totex indexed to Gas ~3.4 CPI and subject to Thereof: Thereof: (Old) general and individual ~4.0 power ~8.3 power efficieny targets ~0.7 gas ~1.2 gas Power ~10.2 (New) ~9.5 ~4.7 ~6.
Slide 59: Energy Networks Germany - Earnings components
Energy Networks Germany - Earnings components Illustrative average EBITDA1 split (2019-2020) Illustrative average EBIT1 split (2019-2020) 0% 0% ~5% Regulated return & depreciation2 ~5% ~10% Operational efficiency ~5% Other infrastructure business3 ~60% ~10% Additional network-related business4 ~50%
Slide 60: Continuous improvement in operative performance increases security of supply
Continuous improvement in operative performance increases security of supply SAIDI1,2 2014 vs. 2019 Power losses2 2014 vs. 2019 Germany Germany 48.0 -40% 4.4 -14% 3.8 29.0 2014 2019 2014 2019 Sweden Sweden 144.0 +18%3 170.0 3.9 -23% 3.0 2014 2019 2014 2019 CEE4 CEE4 336.0 -36% 9.1 -22% 7.1 214.0 201
Slide 61: RAB growth further supported by local drivers
RAB growth further supported by local drivers Power RAB development Local drivers € bn 2-4% CAGR • Renewable connections Germany1 17.3 • Replacement • Digitalization 2019 2022 3-5% CAGR • Storm proofing Sweden2 3.8 • Renewable connections • Demand growth 2019 2022 4-6% CAGR • New connections of B2B
Slide 62: Network charges are only a small portion of German power price
Network charges are only a small portion of German power price Composition of average electricity price Decarbonization currently not optimally supported, electricity disadvantaged • Renewables surcharge to be borne by more customers Electricity Renewable • Carbon minimum price or tax procurement, s
Slide 63: EU financing successful for major growth projects across Europe
EU financing successful for major growth projects across Europe with up to ~€250 m funding grants • More than €500m investments planned ACON2,3 1.0 / ACON 2.0 • Around 50% approved in EU grants • Increasing cross-border power distribution capacity and • All projects included in EU PCI1 list grid mod
Slide 64: City Energy Solutions selected projects
City Energy Solutions selected projects Key figures Project examples Countries with Högbytorp CES projects • 50% increase of renewable/recovered energy >750k customers • 99% efficiency of CHP • 659 GWh total output Hanseviertel Lüneburg ~5k installations • 8,100t CO2 savings per year under managemen
Slide 65: Customer numbers B2B & B2C
Customer numbers B2B & B2C Continued growth outside UK (‘000) Thereof: electricity customers (‘000) Customer accounts +0.1% 40,231 40,249 -0.4% 11,706 11,949 51,087 50,882 6,506 5,885 2,255 2,294 10,210 10,280 13,849 14,205 9,554 9,840 2018 2019 10,669 9,622 Thereof: gas customers (‘000) 4,191 4,259
Slide 66: TWh of production rights for PreussenElektra already transferred
21 TWh of production rights for PreussenElektra already transferred - Terms challenged Nuclear power plant Krümmel1 88 TWh of production rights (before transfer) 21 TWh ~€27.8/MWh preliminary price PreussenElektra Transferred production rights 10 TWh 6 TWh 5 TWh Grohnde plant Isar II plant Brokdorf
Slide 67: Regulated earnings split
Regulated earnings split share EBITDA 20201 € bn regulated • Regulated or quasi Earnings share of ~75% ~75% (Quasi-)regulated earnings strong • Network operations in countries with 7.1 – 7.3 regulatory frameworks • Customer Solutions and Energy Networks Energy Networks Customer Solutions Other2 dive
Slide 68: Past delivery on guidance
Past delivery on guidance EBIT1 vs. guidance Adjusted Net Income1 vs. guidance € bn € bn 3.1 3.1 3.0 3.2 0.9 1.4 1.5 1.5 2016 2017 2018 2019 2016 2017 2018 2019 reported reported Guidance range 1. Adjusted for non operating effects 68
Slide 69: Energy Networks outlook
Energy Networks outlook Energy Networks EBIT1 Guidance 20201 Outlook 2020-20221 Energy Networks1 € bn 3.6 3.3-3.5 Germany: Germany: 0.6 • Organic RAB growth • Organic RAB growth • 2021: base year new 0.5 regulatory period power Sweden: Sweden: 2.4 • Lower allowed WACC • Organic RAB growth 2019 2020
Slide 70: Customer Solutions outlook
Customer Solutions outlook Customer Solutions EBIT1 Guidance 20201 Outlook 2020-20221 Customer Solutions1 € bn Benelux: Benelux: • Stable customer and • Customer growth & margin development growth in new solutions 0.5 0.5-0.7 Germany: Germany: 0.1 • Positive customer • Positive customer 0.1 developm
Slide 71: Corporate Functions & Other outlook
Corporate Functions & Other outlook Corporate Functions & Other Guidance 20201 Outlook 2020-20221 Corporate Functions & Other1 EBIT1 € bn Corporate Corporate Functions & Other: Functions & Other: • Disposal of • Transaction Nordstream 1 stake synergy delivery -0.3 • Ramp up of 2019 ~-0.4 transaction
Slide 72: Non-Core outlook
Non-Core outlook Non-Core EBIT1 Guidance 20201 Outlook 2020-20221 Non-Core1 € bn 0.3-0.5 Turkey Turkey 0.4 Generation: Generation: 0.1 • Non-reoccurrence of • Solid operational high hydro volumes in performance H1 2019 0.3 PreusseElektra: PreussenElektra: 292.0 • Higher hedged prices* • Additional c
Slide 73: Networks Capex breakdown 2020-2022
Networks Capex breakdown 2020-2022 Germany Sweden CEE € bn € bn € bn 6.61 1.11 2.01 ~50% ~50% ~60% investment in expansion investment in expansion investment in expansion Maintenance Grid expansion Other 1. Cash effective investments; pre-economic cycle effects 73
Slide 74: Maintaining a substantial liquidity buffer is a cornerstone of E.ON’s risk management
Maintaining a substantial liquidity buffer is a cornerstone of E.ON’s risk management • €1.9bn in cash & equivalents Key takeaways Large volume of • €1.2bn in short-term securities liquidity1 • €2.4bn of non-current securities • Well-filled liquidity buffer • Funding needs for 2020 • Early de-riskin
Slide 75: Benchmark bonds of E.ON Group
Benchmark bonds of E.ON Group1 Volume in millions in Volume in millions in Issuer respective currency Coupon Maturity Issuer respective currency Coupon Maturity innogy Finance B.V. 750 EUR 1.875% Jan-20 E.ON SE 750 EUR 0.250% Oct-26 E.ON International Finance B.V.2 1,400 EUR 5.750% May-20 E.ON SE 1,
Slide 76: Funding strategy
Funding strategy Volumes €2-4bn p.a. • Bond refinancings • Cash utilization of asset retirement obligations Tenors 3-12 years preferred • Optimize maturity profile & interest costs • Redemptions on any single day capped at €1bn Currencies EUR preferred • Predominantly Euro-based asset base • Regular
Slide 77: innogy’s bondholders will be offered to switch to E.ON
innogy’s bondholders will be offered to switch to E.ON • E.ON is and will be the only active issuer going forward Step 1 – Issuer Substitution in Q1 2020 • Rating agencies have attested that the degree of structural subordination is not significant innogy SE innogy Finance B.V. + innogy SE guarantee
Slide 78: E.ON’s Green Bond Framework
E.ON’s Green Bond Framework Evaluate & Management External Use of proceeds Reporting + select projects of proceeds verification • Finance and/or • Project selection based • E.ON will strive to • Allocation and impact refinance eligible green on eligibility criteria maintain a portfolio reporting aft
Slide 79: PreussenElektra – Further ambition to beat the provisions
PreussenElektra – Further ambition to „beat the provisions“ Solid track-record already until 2019 Nuclear Asset Retirement Obligations1 • Bundling of decommissioning activities € bn 2016 2017 2018 2019 • Procurement successes by „convoy approach“ • Operational progress according to plan Further opti
Slide 80: E.ON‘s Financials 2019
E.ON‘s Financials 2019 Pro forma
Slide 81: E.ON’s Financials — 2019
E.ON’s Financials1 — 2019 Adjusted EBITDA1 Adjusted EBIT1 €m FY 20192 €m FY 20192 Energy Networks 5,359 Energy Networks 3,582 Germany 3,717 Germany 2,438 Sweden 692 Sweden 539 CEE & Turkey 950 CEE & Turkey 605 Customer Solutions 1,124 Customer Solutions 526 Benelux 192 Benelux 125 Germany 646 German
Slide 82: E.ON’s Financials — 2019
E.ON’s Financials1 — 2019 OCFbIT Investments (cash-effective) €m FY 20192 €m FY 20192 Energy Networks 4,255 Energy Networks 3,149 Germany 2,455 Germany 2,254 Sweden 718 Sweden 313 CEE & Turkey 1,082 CEE & Turkey 582 Customer Solutions 378 Customer Solutions 1,008 Benelux 84 Benelux 90 Germany 71 Ger
Slide 83: E.ON’s Financials — 2019
E.ON’s Financials1 — 2019 At-equity contribution to adjusted EBITDA/EBIT1 E.ON Financials P&L €m FY 20192 €m FY 20192 Energy Networks 349 Adjusted EBITDA1 6,897 Germany 219 Depreciation/amortization recognized in Adjusted Sweden 0 -2,763 EBIT CEE & Turkey 130 Adjusted EBIT1 4,134 Customer Solutions
Slide 84: E.ON‘s FY 2019 Results
E.ON‘s FY 2019 Results
Slide 85: EBIT development in line with guidance
EBIT development in line with guidance EBIT1 FY 2019 vs. FY 2018 Key FY effects €m Energy +/–• Germany: new regulatory period power, FY 2018 2,989 one-off effects 2018 Networks +• Sweden: power tariff increase Energy +44 Networks Customer -100 Customer –• UK: regulatory effects (i.e. SVT price cap),
Slide 86: Adjusted Net Income reflecting EBIT development
Adjusted Net Income reflecting EBIT development FY 2019 €m Group EBIT1 3,235 Economic interest result -801 Including innogy financial expenses Profit before 2,434 Taxes1 Income Taxes -554 Tax rate for FY 2019 at ~23% Minorities -344 0.67 EPS2 (€ per share) Adjusted 1,536 Net Income1 1. Adjusted for
Slide 87: FY 2019 Economic Net Debt (END) reconciliation
FY 2019 Economic Net Debt (END) reconciliation € bn AROs -9.1 -8.9 Pension provisions Net financial position -7.2 -8.8 -23.4 -21.7 +1.3 +1.1 +0.2 -39.6 -1.3 -1.1 -39.4 END OCF 4Q 20191 Net Investments Reduction of Pensions3 Other4 END 9M 2019 4Q 20191,2 nuclear AROs FY 2019 1. OCF/ICF including full
Slide 88: E.ON‘s FY 2019 Results – Financial appendix
E.ON‘s FY 2019 Results Financial appendix
Slide 89: Financial Highlights
Financial Highlights €m FY 2018 FY 2019 % YoY Sales 30,084 41,484 +38 EBITDA1 4,840 5,558 +15 EBIT1 2,989 3,235 +8 Adjusted Net Income 1 1,505 1,536 +2 OCFbIT 4,087 4,407 +8 Investments 3,523 5,492 +56 Economic Net Debt² -16,580 -39,430 -138 1. Adjusted for non operating effects 2. Economic Net Debt
Slide 90: Cash Conversion Rate in Q4 recovering as expected
Cash Conversion Rate1 in Q4 recovering as expected FY 2019 € bn 79% CCR 1 5.6 4.4 -0.2 -1.0 2.9 -0.7 -0.8 -5.5 -2.6 EBITDA2 Cash Change in WC OCFbIT Interest Tax Payments OCF Capex FCF Adjustments3,4 Payments 1. Cash Conversion Rate (CCR): OCF bIT ÷ EBITDA 2. Adjusted for non operating effects 3. Ne
Slide 91: Segments: Energy Networks
Segments: Energy Networks EBIT1 Highlights €m 1,844 +2% 1,888 Germany +/– • New regulatory period for power •+ Expansion of regulated asset base (RAB) •– One-off effects in FY 2018 CEE & Turkey 451 428 Sweden 498 539 Germany 895 921 Sweden •+ Power tariff increase FY 2018 FY 2019 €m Germany Sweden C
Slide 92: Segments: Customer Solutions
Segments: Customer Solutions EBIT1 Highlights €m •+ Power: customer growth 413 -24% Germany Sales •– Gas: higher commodity prices & weather effect Germany Sales 160 313 •– Regulatory effects, mainly SVT2 price cap 159 UK •– Competitive dynamics UK 142 11 •+ Effects from restructuring program Other 1
Slide 93: Non-Core business
Non-Core business EBIT1 Highlights €m •+ Higher achieved power prices -4% 382 366 Preussen •– Higher depreciation Elektra •– One-off effects in 2018 •– Transfer of minority stakes to RWE Preussen 292 399 Elektra Generation •+ Operational improvements, mainly higher 74 Turkey hydro volumes in H1 Gene
Slide 94: Adjusted Net Income
Adjusted Net Income €m FY 2018 FY 2019 % YoY EBITDA1 4,840 5,558 +15 Depreciation/amortization -1,851 -2,323 -25 1 EBIT 2,989 3,235 +8 Economic interest expense (net) -674 -801 -19 1 EBT 2,315 2,434 +5 1 Income Taxes on EBT -562 -554 +1 1 % of EBT -24% -23% - Non-controlling interests -248 -344 -38
Slide 95: Reconciliation of EBIT to IFRS Net Income
Reconciliation of EBIT to IFRS Net Income €m FY 2018 FY 2019 % YoY 1 EBITDA 4,840 5,558 +15 Depreciation/Amortization/Impairments -1,851 -2,323 -25 1 EBIT 2,989 3,235 +8 Reclassified businesses of Renewables -513 -300 +42 Interest result -713 -612 +14 Net book gains 857 366 -57 Restructuring -64 -81
Slide 96: Cash effective investments
Cash effective investments1 €m FY 2018 FY 2019 % YoY Energy Networks 1,597 1,655 +4 Customer Solutions 637 724 +14 Renewables 1,037 722 -30 innogy businesses 0 878 - Corporate Functions & Other 86 1,305 - Consolidation -3 1 - Non-Core 169 207 +23 Investments 3,523 5,492 +56 1. Investments from innog
Slide 97: Economic Net Debt
Economic Net Debt1 €m 31 Dec 2018 31 Dec 2019 Liquid funds 5,423 3,602 Non-current securities 2,295 2,353 Financial liabilities -10,721 -29,482 Adjustment FX hedging² -28 167 Net Financial Position -3,031 -23,360 Provisions for pensions -3,261 -7,201 Asset retirement obligations -10,288 -8,869 Econo
Slide 98: Economic interest expense (net)
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Slide 101: Disclaimer
Disclaimer This presentation contains information relating to E.ON Group ("E.ON") that must not be relied upon for any purpose and may not be redistributed, reproduced, published, or passed on to any other person or used in whole or in part for any other purpose. By accessing this document you agree