E.ON SE · XETR:EOAN
E.ON — 6th German Corporate Conference, Deutsche Bank (February 2003)
23 slides from E.ON's conference presentation, Feb 24, 2003
Slide 1: 6th German Corporate Conference, Deutsche Bank
6th German Corporate Conference Deutsche Bank Kiran Bhojani, Executive Vice President Investor Relations, E.ON AG February 24, 2003
Slide 2: E.ON's vision: A global powerhouse
E.ON’s vision: A global powerhouse Pure-Play Utility Global Leadership Position y Electricity and gas as core activities y Leading consolidator in Pan- y Water and services as European markets supplementary businesses y Focused growth outside Europe Best-in-Class Aspiration Successful Integrated Mod
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 – Focus on core business
E.ON Group – Focus on core business E.ON AG Energy Non-core activities Chemicals E.ON Energie Ruhrgas Powergen Degussa 46.5%1 E.ON Energie 100% Ruhrgas 60% Powergen 100% – Germany – Germany – Great Britain Real Estate Viterra 100% • Electricity – International – USA • Natural Gas Telecommunications
Slide 5: E.ON Group – Substantial value creation by divesting non-core assets
E.ON Group – Substantial value creation by divesting non-core assets € in millions Stake Sales Proceeds Total Comments % (equity value) cash inflow4 Listed companies Degussa 46.5 17,3301 - 1,400 Divestment initiated Stinnes 65.4 12,3041 1,600 2,400 Divested in 09/02 MEMC 71.8 9442 - - Divested in 11
Slide 6: E.ON's core business – the energy division
E.ON’s core business – the energy division • E.ON’s energy division constitutes the Group’s core Energy division data (Jan 1 – Sep 30 2002) business activity, accounting for 69% of Group (€ m) Energy1 % of Group total EBITDA Sales 15,598 61% EBITDA 3,921 69% • Amongst E.ON Energie’s activities, elec
Slide 7: Strong European presence
Finland Finland Strong European presence Market share3)3:: Market share §Electricity Electricity 4%7% Sweden Electricity Sweden Marketshare Market share3):3: • Vertically integrated networks reaching 15 Electricity34% §Electricity Gas §Gas 30% 84% 84% million1 customers across the German market
Slide 8: US – Right mix of growth potential, value creation and cultural fit
US – Right mix of growth potential, value creation and cultural fit Generation • Reliable, low cost generation assets • LG&E and KU have the second lowest electricity rates in the US and on average they are 35% lower than the national average MAIN Distribution Detroit • Top quartile regional efficie
Slide 9: Growth is subject to rigorous acquisition criteria
E.ON Group - Growth is subject to rigorous acquisition criteria Strategic Criteria Financial Criteria • Market attractiveness Acquisition must be: (returns, growth, regulation) • Earnings enhancing in the • Target attractiveness (asset first full year after acquisition quality, market position, mana
Slide 10: E.ON Group - Net financial development
E.ON Group - Net financial development In billion € 12.9 4.2 -0.6 -19.8 -1.4 -7.8 -0.4 -12.9 Net financial Cash provided Divestments/ Investments Dividends Consolidation Currency Net financial position as of by (used for) deconsolidations in fixed and of acquisitions effects position as of Dec. 31,
Slide 11: Prudent financing strategy - Commitment to excellent credit quality
Prudent financing strategy - Commitment to excellent credit quality Commitment to • E.ON commits to defending its strong rating and considers a strong ’A’ as a minimum rating strong credit rating • E.ON maintains a pro-active and open dialogue with both Close relationship Moody’s and S&P with rating
Slide 12: Solid financial position with high flexibility
Solid financial position with high flexibility Strong cash flow generation Ready access to bank and capital markets • Core energy division provides • Fully committed syndicated loan facility strong and stable cash flow - € 10 bn, 364 days; general corporate purposes - € 5 bn, 5 years; only for refin
Slide 13: E.ON Group - Outlook 2002
E.ON Group - Outlook 2002 Group internal operating profit to markedly exceed the previous year‘s high number - E.ON Energie: Forecasting substantially higher internal operating profit for full-year 2002. However, internal operating profit growth rate for the full year will not be as high as in the f
Slide 14: Backup Charts
Backup Charts
Slide 15: E.ON Group – Cost management
E.ON Group – Cost management € in millions Realized Realized Realized Planned 1993 - 2000 2001 1993 - 2001 2002 - 2004 Energy 1,490 633 2,123 385* Chemicals 876 50 926 450 Holding - 50 50 - Total 2,366 733 3,099 835 * Only 2002 Page 15
Slide 16: E.ON Group - Reduction of installed generation capacity
E.ON Group - Reduction of installed generation capacity Planned Realized E.ON Energie (2001 – 2003) (as of Sept. 30, 2002) Shutdowns 2,279 MW 1,253 MW Cold reserve 1,333 MW 1,333 MW Staudinger 1 (winter only) 249 MW 249 MW Total reduction of installed capacity 3,861 MW 2,835 MW Shutdown of assets cu
Slide 17: Grid usage fees in Germany (Examples)
Grid usage fees in Germany (Examples) as of January 2003 Standard-rate customer Small special rate customer Large special rate customer Large industrial customer (households) (manufacturing) (manufacturing) (manufacturing, intensive electricity usage) Consumption 3,500 kWh 100,000 kWh 2,000,000 kWh
Slide 18: Grid usage in Germany – Association Agreement (VV II+)
Grid usage in Germany – Association Agreement (VV II+) Previous Association Agreement (VV II) New Association Agreement (VV II+) (until Dec. 31, 2001) (effective as of Jan. 01, 2002) 1. Conditions for customers 1. Improvements for customers • Separate contracts for grid access and usage • Single con
Slide 19: Grid usage fees comparison in Europe
3,760 hours/year 8,760 hours/year 4,200 hours/year as of December 2001 * Excluding regulatory charges Source: Universidad Pontificia Comillas 6 16 0 2 4 8 10 12 14 Au De B stria n e €/MWh De ma lgiu nm k m r De ark (Eas n t De mar (Eas ) nm k ( t)* ark We (W st) e En st)* gla Fin nd lan Fra d Ge nce
Slide 20: Sales volumes of the large European natural gas wholesale suppliers
Sales volumes of the large European natural gas wholesale suppliers in billions m3 59 72 56 Centrica Gasunie 18 Distrigaz Ruhrgas Company Share of domestic Share of domestic 45 wholesale natural retail natural gas gas market market Distrigaz, Belgium approx. 100% approx. 55% 68 Gas Natural, Spain ap
Slide 21: One of the strongest rated private utilities in the world
One of the strongest rated private utilities in the world 18 April 2002 10 January 2003 Senior unsecured: AA- stable outlook Senior unsecured: A1 stable outlook • Strong business position as Germany’s 2nd largest, and • Revised level allows for significant headroom for one of Europe’s largest, verti
Slide 22: E.ON Group – Bonds' maturity profile
E.ON Group – Bonds´ maturity profile Issuer (Rating)1 Currency Amount in mm Coupon Due Date E.ON International Finance BV (E.ON A1/AA-) EUR 4,250 5.750% 2009 GBP 500 6.375% 2012 EUR 900 6.375% 2017 GBP 975 6.375% 2032 Powergen UK plc. (A2/A) GBP 250 8.875% 2003 GBP 250 8.500% 2006 EUR 500 5.000% 200
Slide 23: Powergen's acquisition of TXU
Powergen`s acquisition of TXU Assets Acquired Synergies / Benefits • 5.5 m customers, Powergen now totals 9.1m • Significant reduction in staff and properties • 3 Power Stations - 3,000MW, small CHP • 1,800 staff, various properties • No long-term contracts Integration Progress • Re-Branding to Powe
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