Slide 1: 2013 full year results
2013 full year results 12 March 2014
Slide 2: Reshaping E.ON: 2013 achievements
Reshaping E.ON: 2013 achievements EBITDA1 Underlying net income 1 Highlights €9.2-9.3bn €9.3bn €2.2-2.4bn €2.2bn EBITDA and underlying net income within outlook range Efficiency program E.ON 2.0 on track Outlook Actual Outlook Actual Rigorous optimization of European power plant portfolio Divi
Slide 3: 2014 outlook
2014 outlook EBITDA1 Underlying net income1 €9.3bn €8.0-8.6bn €2.2bn €1.5-1.9bn 2013A 2014E 2013A 2014E 2 1. Adjusted for extraordinary effects
Slide 4: Reshaping E.ON: 2014 focus areas
Reshaping E.ON: 2014 focus areas 1 Strengthen performance culture 2 Push for adequate business environment 3 Improve capital management 4 Invest prudently into priority areas 3
Slide 5: Strengthen performance culture
1 Strengthen performance culture E.ON 2.0 net cost savings E.ON 2.0 €bn Almost all cost savings measures now decided 1,2 Implementation largely completed by end 2014 €0.9bn of net cost savings achieved so far out 0,8 of €1.3bn, thereof €0.7bn in 2013 0,4 ~7,700 FTE reduction by end 2013 out
Slide 6: Example: Simplify our German sales organization
1 Example: Simplify our German sales organization Starting point 2012 Target structure 2015 E.ON E.ON E.ON Deutschland Avacon Hanse E.ON E.ON E.ON Bayern e.dis Ruhrgas E.ON Energie Deutschland E.ON E.ON E.ON & E Wie Einfach Westfalen Thüringer Mitte Weser Energie E Wie E.ON Einfach Direkt Customer O
Slide 7: Push for adequate business environment
2 Push for adequate business environment Outpace competition Principles Examples Put the customer first From 6 weeks to 6 days to get last customer Identify and monetize emerging trends re-connected after severe storms in Sweden Develop portfolio of compelling and uSwitch elects E.ON as Br
Slide 8: Examples: putting the customer first
2 Examples: putting the customer first Weather-securing Swedish networks Compelling products and services Customers without power after strong storms Teaming up with customers for on-site 250 generation solutions Gudrun 2005 Expansion of German CHP business with 200 Per 2007 Thousand customers add
Slide 9: Improve capital management
3 Improve capital management Proactive portfolio management Capital rotation concept validated Looking back … Proceeds of more than €0.7bn from 2 major €6.2bn of disposal proceeds in 2013 renewables transactions in 2013 and 2014 Beyond de-leveraging, transactions Long-term service contracts
Slide 10: Invest prudently into priority areas
4 Invest prudently into priority areas Capex 2012-20161 Reduction to ~€5bn in 2014, and then further €bn to ~€4bn in 2016 Focus on transformation, around two thirds of 6 capex allocated to priority businesses: Distribution networks 4 Energy Sales & Solutions Renewables 2 Non-EU: completi
Slide 11: Towards a more balanced portfolio
Towards a more balanced portfolio Transformation of portfolio advancing Share of NOPAT1 Higher share of regulated downstream, of 100% renewables, and from outside Europe Lower share from pure commodity businesses 80% Better earnings mix and well positioned to benefit from energy system transfo
Slide 12: 2013 EBITDA development
2013 EBITDA1,2 development €bn FY 2012 EBITDA 10.8 E.ON 2.0 0.7 E&P 0.5 Renewables (EC&R) 0.1 Gazprom settlement one-off 2012 -0.7 Divestments -0.8 Revaluation one-off 2012 -0.2 Provision effects (Germany) -0.1 Power price and volume effect -0.4 Absence of free CO2 certificates -0.8 Turkey/Brazil -0
Slide 13: 2013 underlying net income
2013 underlying net income €m FY 2012 FY 2013 % YoY EBITDA 1 10,771 9,315 -14% Depreciation/amortization recognized in EBIT 1 -3,759 -3,634 - EBIT 1 7,012 5,681 -19% Economic interest expense (net) -1,329 -1,823 - EBT 1 5,683 3,858 -32% Income taxes on EBT 1 -1,140 -1,186 - % of EBT 1 20.1% 30.7% -
Slide 14: 2013 operating cash flow development
2013 operating cash flow development1 FY 2012 operating cash flow 8.8 EBITDA -1.5 Provision effects in EBITDA 0.1 Revaluation one-offs in 2012 EBITDA 0.2 Global Commodities: Higher net gas extraction in 2013 0.1 Global Commodities: Lower payables from gas LTC -0.4 Generation UK: Coal inventory reduc
Slide 15: 2013 economic net debt development
2013 economic net debt development €bn Economic net debt 2012 1 -21.4 -14.4 -35.8 Investments -8.1 Net financial position Provisions and other Dividends -2.3 Other -0.9 Divestments +7.2 Operating cash flow +6.4 Pension provisions2 +1.5 Economic net debt 2013 1 -20.5 -11.5 -32.0 1. As per December 31
Slide 16: 2014 outlook
2014 outlook EBITDA1 Underlying net income1 €bn €bn 2013A 2014E FY 2013A EBITDA 9.3 EBITDA 9.3 8.0 – 8.6 2.0 Savings Depreciation 3.6 E&P Adj. interest expense 1.8 Renewables: EC&R Taxes 1.2 Disposals Germany: Regulation effects Minorities 0.4 Power Portfolio Underlying net income 2.2 1.5 –
Slide 17: 2014 EBITDA outlook per unit
2014 EBITDA1 outlook per unit €bn 2013A 2014E Main drivers E.ON 2.0 cost savings, transfer of biomass Generation 1.9 activities to Generation, Maasvlakte start-up Higher book gain from capital rotation, lower Renewables 1.4 hydro prices and volumes Exploration & Production 1.1 Higher productio
Slide 18: Conventional generation dynamics
Conventional generation dynamics EBITDA Generation + Hydro Earnings bottoming out €bn Hydro Strong decline of earnings from energy markets wholesale Increasing importance of other earnings sources Generation wholesale Rigorous optimization of plant portfolio and cost Hydro structures other1 Ge
Slide 19: Debt and dividend policy confirmed
Debt and dividend policy confirmed Medium term debt factor target <3x Dividend payout ratio: 50-60% €bn 1,6 100% 40 4 30 3 1,2 75% 20 2 0,8 50% 10 1 0,4 25% 0 0 0,0 0% 2010 2011 2012 2013 2010 2011 2012 2013 Provisions & Other (LHS) Dividend (LHS) Pay-out ratio (RHS) Net financial debt (LHS) Debt fa
Slide 20: Backup
Backup 19
Slide 21: Financial highlights
Financial highlights €m FY 2012 FY 2013 % YoY Sales 132,093 122,450 -7% EBITDA 1 10,771 9,315 -14% EBIT 1 7,012 5,681 -19% Underlying net income 1 4,170 2,243 -46% Operating cash flow 8,808 6,375 -28% Investments 2 6,997 8,086 +16% Economic net debt -35,845 -31,991 +3,8543 1. Adjusted for extraordin
Slide 22: EBITDA and EBIT by unit
EBITDA and EBIT by unit €m EBITDA 1 EBIT 1 FY 2012 FY 2013 % YoY FY 2012 FY 2013 % YoY Generation 2,396 1,882 -21% 1,435 973 -32% Renewables 1,349 1,431 +6% 955 982 +3% Global Commodities 1,421 352 -75% 1,163 220 -81% Exploration & Production 523 1,070 +105% 293 560 +91% Germany 2,734 2,413 -12% 1,7
Slide 23: From EBITDA to net income (1/2)
From EBITDA to net income (1/2) €m FY 2012 FY 2013 % YoY EBITDA 1 10,771 9,315 -14% Depreciation/Amortization/Impairments -3,759 -3,634 - EBIT 1 7,012 5,681 -19% Economic interest expense (net) -1,329 -1,823 - Net book gains 322 1,998 - Restructuring and cost-management expenses -618 -555 - Mark-to-
Slide 24: From EBITDA to net income (2/2)
From EBITDA to net income (2/2) €m FY 2012 FY 2013 % YoY Income/Loss from continuing operations before 3,274 3,206 -2% income taxes Income taxes -698 -703 - Income/Loss from discontinued operations (net) 37 7 - Non-controlling interests -424 -368 - Net income/loss attributable to shareholders of E.O
Slide 25: Generation
Generation €m EBITDA 1 EBIT 1 FY 2012 FY 2013 % YoY FY 2012 FY 2013 % YoY Nuclear 792 1,167 +47% 535 894 +67% Steam 1,226 572 -53% 779 212 -73% CCGT 433 156 -64% 182 -118 - Other/Consolidation -55 -12 - -61 -15 - Total 2,396 1,882 -21% 1,435 973 -32% Main EBITDA effects (in €bn) Nuclear (+0.4) Abs
Slide 26: Renewables
Renewables €m EBITDA 1 EBIT 1 FY 2012 FY 2013 % YoY FY 2012 FY 2013 % YoY Hydro 787 780 -1% 683 657 -4% Wind/Solar/Other 562 651 +16% 272 325 +19% Total 1,349 1,431 +6% 955 982 +3% Main EBITDA effects (in €bn) Hydro (+/-0) Main positive effect: Absence of negative prior year one-off related to a p
Slide 27: Global Commodities
Global Commodities €m EBITDA 1 EBIT 1 FY 2012 FY 2013 % YoY FY 2012 FY 2013 % YoY Proprietary Trading -61 -49 - -62 -52 - Optimization 750 238 -68% 551 127 -77% Gas Transport/Other 732 163 -78% 674 145 -78% Total 1,421 352 -75% 1,163 220 -81% Main EBITDA effects (in €bn) Optimization (-0.5) Mainly
Slide 28: Exploration & Production
Exploration & Production €m EBITDA 1 EBIT 1 FY 2012 FY 2013 % YoY FY 2012 FY 2013 % YoY Total 523 1,070 +105% 293 560 +91% Main EBITDA effects (in €bn) North Sea fields (+0.6) Higher volumes mainly from Skarv (+0.7) Increased opex driven by new fields Skarv and Hyme (-0.1) Yushno Russkoje (+/-0)
Slide 29: Germany
Germany €m EBITDA 1 EBIT 1 FY 2012 FY 2013 % YoY FY 2012 FY 2013 % YoY Distribution 1,792 1,985 +11% 1,128 1,343 +19% Non-regulated/Other 942 428 -55% 638 350 -45% Total 2,734 2,413 -12% 1,766 1,693 -4% Main EBITDA effects (in €bn) Distribution Networks (+0.2) Lower controllable cost (+0.1) Posi
Slide 30: Other EU Countries
Other EU Countries €m EBITDA 1 EBIT 1 FY 2012 FY 2013 % YoY FY 2012 FY 2013 % YoY Distribution 1,289 1,347 +4% 878 919 +5% Sales 354 524 +48% 250 440 +76% Other/Consolidation 389 302 -22% 216 173 -20% Total 2,032 2,173 +7% 1,345 1,532 +14% Main EBITDA effects (in €bn) Distribution Networks (+0.1)
Slide 31: Non-EU Countries
Non-EU Countries €m EBITDA 1 EBIT 1 FY 2012 FY 2013 % YoY FY 2012 FY 2013 % YoY Russia 729 687 -6% 546 492 -10% (in Mio Ruble) (29,118) (29,021) ( -0%) (21,784) (20,756) ( -5%) Other Non-EU -11 -154 - -11 -154 - countries Total 718 533 -26% 535 338 -37% Main EBITDA effects (in €bn) Russia (+/-0) I
Slide 32: E&P - Oil & Gas production
E&P - Oil & Gas production m boe Q4 2012 Q4 2013 % YoY FY 2012 FY 2013 % YoY Skarv 0.0 2.0 - 0.0 10.0 - Njord/Hyme 0.2 0.0 -100% 2.6 2.4 -7% Elgin-Franklin 0.0 0.2 - 0.5 0.6 +6% Babbage 0.2 0.3 -11% 0.9 0.8 -9% Rita 0.0 0.3 - 0.0 0.3 - Total North Sea 0.8 4.6 +446% 5.3 16.5 +211% Yuzhno Russkoje 10.
Slide 33: E&P: harvesting mode after strong investments
E&P: harvesting mode after strong investments Oil & gas production Focus on organic growth with short-term mboe emphasis on exploration 37.7 37.4 ~37 Very encouraging Tolmount discovery Successful ramp-up of Skarv Njord platform under review – Njord and Hyme 19-23 production not included in
Slide 34: Cash effective investments by unit
Cash effective investments by unit €m FY 2012 FY 2013 % YoY Generation 1,555 900 -42% Renewables 1,791 1,028 -43% Global Commodities 319 159 -50% Exploration & Production 573 404 -29% Germany 1,070 1,013 -5% Other EU countries 1,063 1,056 -1% Non-EU Countries 1 719 3,530 - Group Management / Consoli
Slide 35: Economic net debt
Economic net debt €m 31 Dec 2012 31 Dec 2013 Liquid funds 6,546 7,314 Non-current securities 4,746 4,444 Financial liabilities -25,944 -23,260 Adjustment FX hedging 1 234 -46 Net financial position -14,418 -11,548 Provisions for pensions -4,945 -3,418 Asset retirement obligations -16,482 -17,025 Eco
Slide 36: Financial liabilities of the E.ON Group
Financial liabilities of the E.ON Group Full year 2013 in € billion Maturity profile (as of 31 Dec 2013)3 31 Dec 2013 31 Dec 2012 Bonds1 18.1 20.7 in EUR 10.4 12.0 in GBP 4.4 4.5 in USD 2.2 2.3 in CHF 0.6 0.9 in SEK 0.1 0.1 in JPY 0.3 0.7 other currencies 0.1 0.2 Promissory notes 0.7 0.8 Commercial
Slide 37: Economic interest expense (net)
Economic interest expense (net) €m FY 2012 FY 2013 Difference Interest from financial assets/liabilities -1,099 -964 135 Interest cost from provisions for pensions and similar provisions 1 -137 -150 -13 Accretion of provisions for retirement obligation and other provisions -950 -848 102 Capitalized
Slide 38: Disposal proceeds and dilution overview
Disposal proceeds and dilution overview Disposal proceeds 1,2,3 EBITDA effect of disposals in 2013 and 2014 (€bn) Gazprom 1,6 Disposal impact 2014 Central Networks 1,4 Disposal impact 2013 Open Grid Europe 1,2 50% of Horizon E.ON Rete 1,0 HSE Shares 0,8 Other transactions 0,6 Closed tr
Slide 39: Dividend either in cash or in E.ON shares
Dividend either in cash or in E.ON shares Voluntary Additional option for shareholders to exchange the cash dividend into E.ON shares scrip Cash payment is default dividend Subscription price will be close to market price (considering a discount of up to 3%1) Use of E.ON will make use of its
Slide 40: Disclaimer
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