E.on Se · XETR:EOAN
E.on — Debt Investor Presentation (April 2009)
24 slides from E.on's debt investor presentation, Apr 3, 2009
Slide 1: E.ON Non-Deal Debt Investor Call
E.ON Non-Deal Debt Investor Call April 03, 2009
Slide 2: Outlook & Strategy Update; Financial Situation; Funding Program
1. Outlook & Strategy Update 2. Financial Situation 3. Funding Program 1
Slide 3: Solid earnings growth and record investments
Solid earnings growth and record investments Highlights of the 2008 annual results y Adjusted EBIT up 7% to € 9.9 bn CAGR 11.8% 9,878 y Adjusted net income +9% to € 5.6 bn 9,208 8,356 y Net income attributable to shareholders 7,293 € 1.3 bn due to non-operating earnings 6,747 y ROCE 12.9% following
Slide 4: Adj. EBIT 2009 - main drivers impacting 2009 vs. 2008
Adj. EBIT 2009 - main drivers impacting 2009 vs. 2008 from group perspective Outright power prices New Markets Regulation Exchange Economic Gas rates Crisis upstream Key data y Central Europe y 2008 CO2 cost y Gas transport y British Pound y Volume y € 344 m in 2008 4-5 €/MWh of 250 million with cos
Slide 5: Expected effects impacting 2010 vs. 2009
Expected effects impacting 2010 vs. 2009 How to grow by over 1 billion in 2010 Drivers (rough estimates in € million) Cost Other Upside from higher power prices +800 savings y Upside from higher power prices for outright power position (+ 5-6 €/MWh) New y Full operation of two nuclear power stations
Slide 6: Near-term focus on performance, organic growth & portfolio management
Following substantial expansion, E.ON’s near-term focus is on performance, organic growth & portfolio management Current E.ON position Short-/mid-term priorities y Substantial geographic expansion (e.g. Russia, Spain) achieved 1 y Pan-European platform (e.g. bundling of ‘Perform-to-Win’ initiative t
Slide 7: Perform-to-Win - To deliver up to € 1.5 bn EBIT by 2011
1 Perform-to-Win - To deliver up to € 1.5 bn EBIT by 2011 Breakdown by function Cost savings ~€ 1,100 m y Numerous key topics enveloping a far higher number of Gas individual projects identified to achieve ambitious goal Infrastructure y Main cost savings in overheads and sales Generation Productivi
Slide 8: Revised Investment plan 2009–2011 vs. 2007-2010
2 Revised Investment plan 2009–2011 vs. 2007-2010 in € bn Prior investment plan 2007-2010 New investment plan 2009-2011 (still under review) ~13 68% for growth 32% for maintenance ~36 ~26 ~5 ~30 E&P & LNG ~63 ~12 ~15 Generation/Heat ~5 Renewables ~24 ~6 Power grid ~3 Gas storage and grid ~2 Other 20
Slide 9: Market fundamentals remain attractive: generation to be replaced by 2030
2 Market fundamentals remain attractive: More than 50 % of Europe's generation has to be replaced by 2030 Development of generation from existing power plants in Europe1 5000 in TWh/a 4000 Demand growth Nuclear 3000 approx. 0.7 % p.a. Hard Coal 2000 Lignite Gas/oil 1000 Renewables 0 Hydro 2016 2012
Slide 10: Portfolio streamlining will generate at least € 10 bn of divestment proceeds
3 Portfolio streamlining will generate at least € 10 bn of divestment proceeds in 2009-2010 Transaction Expected Cash closing proceeds Closed Statkraft asset swap Dec 2008 8 y Portfolio review is Swap of 1.7 GW generation capacity with Electrabel Q2 2009 8 progressing well Pending Disposal of 0.5 GW
Slide 11: Outlook & Strategy Update; Financial Situation; Funding Program
1. Outlook & Strategy Update 2. Financial Situation 3. Funding Program 10
Slide 12: E.ON's capital structure is managed based on the Debt factor
E.ON‘s capital structure is managed based on the Debt factor Development of E.ON’s Debt factor Financial discipline 3.2x 1 y Debt factor of 3x defines our target capital 3x structure 1.9x y Debt factor range between 2.8x and 3.3x is 1.6x compatible with Single A target rating (based on current ratin
Slide 13: E.ON Group – Economic net debt
E.ON Group – Economic net debt in € million Dec. 31, 2008 Dec. 31, 2007 Liquid funds and non-current securities 11,365 13,970 Financial liabilities -41,058 -21,464 Net financial position -29,693 -7,494 Fair value of currency derivatives used for financing transactions1 1,988 706 Provisions for pensi
Slide 14: E.ON Group - Operating cash flow and Funds from operations
E.ON Group - Operating cash flow and Funds from operations in € billion Major changes in Working Capital -0.7 -0.8 -0.8 +0.3 8.7 6.7 Operating PEG: UK: EET/UK: CC/Other Operating cash flow Effect from Increased CO2- cash flow 0 31 Dec 2007 gas storage receivables certificates 31 Dec 2008 retail 2008
Slide 15: Pension Assets - Performance
Pension Assets - Performance as of Dec 31, 2008, in € bn (VKE assets included) y Reduction in pension assets mainly 15,5 -0,4 driven by exchange rate differences +0,3 -0,5 (-1,5). Almost entirely compensated by exchange rate effect on liabilities (-1,4) -1,5 13,4 y Total losses in market value of pe
Slide 16: Outlook & Strategy Update; Financial Situation; Funding Program
1. Outlook & Strategy Update 2. Financial Situation 3. Funding Program 15
Slide 17: Since September 2007, approximately € 25.5 billion has been funded
Since the start of our Funding Program in September 2007, approximately € 25.5 billion has been funded Status as of 02 April 2009 € in bn1 y Total funding of approximately € 25.5 bn EUR benchmark tranches 14.0 has an average interest rate of ~5.3% GBP benchmark tranches 3.3 y Use of Commercial Paper
Slide 18: E.ON has a sound financial position
E.ON has a sound financial position E.ON Funding Program 2007-2010 Diverse funding structure in € bn Funding Program: 30 y Successful funding of € 25.5 bn of bonds and loans 5.9 since September 2007 20 13.4 30 Syndicated Credit Facility: 10 6.2 y In November 2008 extension of 364-day tranche with 0
Slide 19: Limited maturities in next three years
Limited maturities in next three years Bonds of E.ON AG & E.ON International E.ON successfully pursued its Funding Finance B.V.1 - Maturity profile (in € bn) Program despite challenging market conditions: 5.0 y Several successful reopenings of EUR Corporate 4.0 bond markets 3.0 y Successful debut in
Slide 20: Back-up Charts
Back-up Charts
Slide 21: E.ON has established a liquid secondary curve
Since the start of our Funding program, E.ON has established a liquid secondary curve 225 EOAGR 5.5% 16 (at launch) EOAGR 4.875% 14 200 (at launch) EOAGR 5.75% 20 175 Spread over ASW (bp) EOAGR 4.125% 13 EOAGR 5.5% 16 EOAGR 5.5% 17 (at launch) EOAGR 5.25% 15 EOAGR 4.75% 10 (at launch) EOAGR 5.25% 14
Slide 22: E.ON Group – Financial highlights
E.ON Group – Financial highlights in € million 2008 2007 +/- % Sales 86,753 68,731 +26 Adjusted EBITDA 13,385 12,450 +8 Adjusted EBIT 9,878 9,208 +7 Adjusted net income 5,598 5,115 +9 Cash provided by operating activities 6,738 8,726 -23 Economic investments 26,236 12,456 +111 Economic net debt -44,
Slide 23: E.ON Group – Adj. EBIT and adj. EBITDA by market unit
E.ON Group – Adj. EBIT and adj. EBITDA by market unit in € million Adjusted EBIT Adjusted EBITDA 2008 2007 +/-% 2008 2007 +/- % Central Europe 4,720 4,670 +1 6,266 6,222 +1 Pan-European Gas 2,631 2,576 +2 3,113 3,176 -2 U.K. 922 1,136 -19 1,396 1,657 -16 Nordic 770 670 +15 1,112 1,027 +8 U.S. Midwes
Slide 24: Forward-looking statements disclaimer
This presentation may contain forward-looking statements based on current assumptions and forecasts made by E.ON Group management and other information currently available to E.ON. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual