E.on Se · XETR:EOAN
E.on — FY 2021 Earnings Presentation
45 slides from E.on's earnings presentation, Mar 16, 2022
Slide 1: FY 2021 results
16th March 2022 #StandWithUkraine FY 2021 results
Slide 2: Humanitarian crisis affects all of us - E.ON supporting with variety of measures
Humanitarian crisis affects all of us - E.ON FY 2021 results E.ON supporting with variety of measures 4 E.ON markets with borders to Ukraine ~€2 million donation Support and donations E.ON supports affected regions and matches donations from employees PL Regional support from E.ON entities SK Ukrain
Slide 3: Time for action: multiple implications from the war for the European energy sector
Time for action: multiple implications from the war for the E.ON FY 2021 results European energy sector and it’s customers Short-term Long-term Access to gas in situation of shortages Reduce dependency from Russia through Enough liquidity on European wholesale markets now but tighter diversification
Slide 4: Drastic short-term measures required to replace Russian gas supply next winter
Drastic short-term measures required to replace E.ON FY 2021 results Russian gas supply next winter Short-term measures to compensate Russian gas imports TWh >60 Annual demand Supply structure Germany >35 ~870 1% Transport <40 >20 ~20 Consequence: 27% Industry Incentives to Loss of Production Reacti
Slide 5: Sufficient options to replace Russian gas supply in the long run
Sufficient options to replace Russian gas supply E.ON FY 2021 results in the long run – but timely decisions required Long-term measures to reduce German dependency on Russian gas by start time and potential 2022 2025 2030 Potential TWh Delay of coal phase-out 25-150 Demand Accelerate RES expansion
Slide 6: 2021 delivery above expectations despite operational challenges and volatile macro environment
2021 delivery above expectations despite operational E.ON FY 2021 results challenges and volatile macro environment We are the reliable partner for energy infrastructure and solutions 2021 with strong delivery EBITDA Covid-19 E.ON is the operator of system critical infrastructure and a €7.9bn reliab
Slide 7: We successfully progress on our strategic priorities
We successfully progress on our strategic priorities E.ON FY 2021 results Growth Sustainability Digitalization • ~€5.3bn investments in 2022 and • 107m tons avoided CO2 emissions in • 100,000 smart meters in Germany ~€27bn until 2026 2021 • Investments into digital start-ups to • At least 6% power R
Slide 8: We commit to annually grow the dividend - also beyond 2026
We commit to annually grow the dividend - E.ON FY 2021 results also beyond 2026 Dividend per share € up to 5% DPS growth p.a. until 2026 0.46 0.47 0.491 0.43 0.30 0.21 2016 2017 2018 2019 2020 2021 2026 Growth beyond We delivered … … and will continue to deliver 8 1. Subject to 2022 AGM approval
Slide 9: Financial Update
Financial Update
Slide 10: Short-term impact on earnings from high energy prices
Short-term impact on earnings from high energy prices E.ON FY 2021 results Energy Networks Temporary exposure to higher energy prices Higher costs for network losses recoverable in the following years Customer Solutions Neutral exposure to higher energy prices Fully hedged for 20221 - Higher costs f
Slide 11: Energy Networks: only temporary impact from higher energy prices for network losses
Energy Networks: only temporary impact from E.ON FY 2021 results higher energy prices for network losses Regulatory accepted Impact from Estimated 2022 net impact from Recovery Countries procurement approach & network losses on network losses mechanism for Scenario 1 Scenario 2 tariff reflection 202
Slide 12: Customer Solutions: Limited risk exposure from prudent sourcing and lower B2B volumes
Customer Solutions: Limited risk exposure from prudent E.ON FY 2021 results sourcing and lower B2B volumes FY 2021 gas volumes sold (B2C & SME, B2B)1 Volume sold to B2B customers (power and gas) TWh p.a. TWh p.a. 300 ~260 Sourcing: Contracted wholesale gas volumes 2022 -2024 with Subsidiaries of 150
Slide 13: Customer Solutions: Limited liquidity exposure despite extreme prices
Customer Solutions: Limited liquidity exposure despite E.ON FY 2021 results extreme prices Limited liquidity impact from exchange margining Limited impact on working capital Exchange margining development from energy sourcing1: Illustrative development of working capital (cash view): Total margin 31
Slide 14: Strong operations leading to significant growth
Strong operations leading to significant growth E.ON FY 2021 results FY 2021 key financials1 Highlights FY 2021 yoy +14% +52% Strong performance Beat on earnings guidance due to excellent operations €7.9bn €0.96 5.9x Synergy target €6.9bn 4.9x Fully achieved synergy target of additional ~€180m €
Slide 15: EBITDA up 1-billion-euro year over year
EBITDA up 1-billion-euro year over year E.ON FY 2021 results EBITDA1 Key drivers €m +• Covid-19 impact in 2020 FY 2020 6,905 Energy +/–• Germany: normalized weather/ regulatory cycle Networks Energy –• Sweden /CEE & Turkey: higher costs for network -198 losses Networks Customer +• UK: ongoing restru
Slide 16: Adjusted Net Income following EBITDA development
Adjusted Net Income following EBITDA development E.ON FY 2021 results FY 2021 €m vs. FY 2020: vs. FY 20202: +14% +53% 7,889 0.96 EPS Tax rate at ~23% (€ per share) 4,723 -3,166 3,779 -944 2,503 -880 -396 Group EBITDA1 D&A Group EBIT1 Economic Profit Income taxes Minorities Adjusted interest result b
Slide 17: Positive debt factor development ahead of plan supports strong BBB/Baa rating
Positive debt factor development ahead of plan supports E.ON FY 2021 results strong BBB/Baa rating Economic net debt €bn Asset Retirement Obligations (ARO) -8.0 -8.7 Pension provisions Net financial position -6.1 -8.1 Debt factor target3 4.8x -5.2x -24.7 -24.0 +4.1 FY 2021: 4.9x +2.0 +0.4 +0.7 +0.
Slide 18: Guidance 2022 including substantial year over year growth in our core earnings
Guidance 2022 including substantial year over year E.ON FY 2021 results growth in our core earnings EBITDA1 EBITDA1 key drivers 2022 €bn 7.9 7.6-7.82 Core Core +• Realization of synergies +• Strong business growth 1.6 +• Increased power prices 6.9-7.12 Non-Core –• Phase out Brokdorf & Grohnde –• Nuc
Slide 19: Substantial Energy Networks earnings growth from increased efficiencies & capex driven growth
Substantial Energy Networks earnings growth from E.ON FY 2021 results increased efficiencies & capex driven growth Energy Networks EBITDA1 EBITDA1 key drivers 2022 €bn 5.5-5.72 All All +• Organic RAB growth 5.0 1.0 +• Realization of synergies Germany 0.5 +• Increase in efficiencies Sweden –• Higher
Slide 20: Customer Solutions earnings growth despite adverse market environment
Customer Solutions earnings growth despite adverse E.ON FY 2021 results market environment Customer Solutions EBITDA1 EBITDA1 key drivers 2022 €bn +• Germany: operational improvements and realization of synergies 1.5-1.72 • UK: ongoing restructuring benefits; 1.5 Energy +/- Retail higher energy pric
Slide 21: Strong double digit Core EPS growth mainly driven by business growth
Strong double digit Core EPS growth mainly driven by E.ON FY 2021 results business growth Group Adjusted Net Income1 Group Earnings per share1 €bn € 2.5 2.3-2.52 0.4 0.9 0.88-0.962 0.96 0.34 0.16 1.9-2.12 0.73- 1.6 0.802 0.62 FY 2021 FY 2022 FY 2021 FY 2022 Guidance: Core3 Non-Core 1. Adjusted for n
Slide 22: Investments 2022 in line with growth strategy
Investments 2022 in line with growth strategy E.ON FY 2021 results Investments 2022 Investments 2022-2026 €bn €bn ~95% ~95% ~5.31 EU taxonomy aligned2 ~271 EU taxonomy aligned2 Energy Networks Customer Solutions Corporate Functions & Other 1. Cash-effective investments including Corporate Functions
Slide 23: We are well on track to achieve our delivery plan until 26
We are well on track to achieve our delivery plan until E.ON FY 2021 results 2026 Dividend per share (DPS) growth of up to 5% p.a. until 2026 €0.49 dividend for FY 20211 EBITDA2,3 2026: ~€7.8bn / 4-5% CAGR4 2022-2030: Average 5-year EPS2,3 2026: ~€0.90 / 7-9% CAGR4 rolling5 EPS CAGR at least 5% Tota
Slide 24: Financial Appendix
E.ON FY 2021 results Financial Appendix 24
Slide 25: Guidance overview
Guidance overview E.ON FY 2021 results 2022-2030 €bn Actual FY 2021 FY 20225 FY 2026 CAGR 21-268 (5yr rolling)9 Core EBITDA1 6,272 6.9-7.1 ~7.8 4-5% - Energy Networks 4,988 5.5-5.7 6.0-6.2 ~4% - Customer Solutions 1,492 1.5-1.7 1.9-2.2 5-8% - Energy Retail 1,013 1.0-1.2 1.2-1.4 3-6% - Energy Infrast
Slide 26: Segment outlook 2022
Segment outlook 2022 E.ON FY 2021 results EBITDA1 key drivers 2022 Energy Networks Customer Solutions Non-Core •+ Organic RAB growth Energy Retail: PreussenElektra: Germany: +• Germany: operational improve- +• Increased power prices ments and realization of synergies •+ Realization of synergies –• P
Slide 27: We put sustainability at the heart of everything we do
We put sustainability at the heart of everything we do E.ON FY 2021 results Steering & Reporting Decarbonization is key: Base planning of CO2-footprint until 2030 and annual tracking of CO2 reduction required by each Management Units Prepare for upcoming regulation: Implement TCFD requirements in ri
Slide 28: Financial overview
Financial overview €m FY 2020 FY 2021 % YoY Sales 60,944 77,358 +27 EBITDA1 6,905 7,889 +14 1 EBIT 3,776 4,723 +25 Adjusted Net Income1 1,638 2,503 +53 OCFbIT 5,948 5,639 -5 Investments 4,171 4,762 +14 Economic Net Debt² -40,736 -38,773 +5 1. Adjusted for non-operating effects 2. Economic Net Debt a
Slide 29: Cash conversion rate of 80% in FY 2021
Cash conversion rate1 of 80% in FY 2021 E.ON FY 2021 results €bn 80% CCR1 7.9 -1.1 5.6 -1.2 4.1 -0.9 -0.7 -4.8 -0.7 Group Cash Change in WC OCFbIT Interest Tax payments OCF Capex FCF EBITDA2 adjustments3 payments 1. Cash Conversion Rate (CCR): (OCF bIT + provision utilization nuclear) ÷ EBITDA 2. Ad
Slide 30: EBIT growth above expectations
EBIT growth above expectations E.ON FY 2021 results EBIT1 Key drivers €m + • Covid-19 impact in 2020 Energy +/– • Germany: normalized weather/ FY 2020 3,776 regulatory cycle Networks – Sweden /CEE & Turkey: higher costs for • Energy network losses -272 Networks Customer + • UK: restructuring benefit
Slide 31: Divisions: Energy Networks
Divisions: Energy Networks E.ON FY 2021 results EBITDA1 Drivers €m All + • Covid-19 impact in 2020 + 5,186 -4% 4,988 • Organic RAB growth CEE & Turkey 1,029 Germany + • Normalized weather (vs. FY 2020) Sweden 529 1,023 507 – • Regulatory cycle Sweden – • Higher costs for network losses Germany 3,628
Slide 32: Divisions: Customer Solutions
Divisions: Customer Solutions E.ON FY 2021 results EBITDA1 Drivers €m All + • Covid-19 impact in 2020 + +45% 1,492 – • Normalized weather (vs. FY 2020) -• Higher energy prices 419 Germany Other 1,026 + • Realization of synergies 327 261 UK 1 152 UK + • Ongoing restructuring benefits Benelux 152 – -•
Slide 33: Divisions: Customer Solutions – EIS/Retail
Divisions: Customer Solutions – EIS/Retail E.ON FY 2021 results EBITDA1 Drivers €m +• UK: ongoing restructuring benefits +• Realization of synergies 1,492 +50% Energy +• Covid-19 impact in 2020 1,026 Retail +• Normalized weather (vs. FY 2020) 1,013 –• Higher energy prices –• Supplier of last resort
Slide 34: Customer numbers B2B & B2C
Customer numbers B2B & B2C E.ON FY 2021 results Customer accounts (m)1 Thereof: electricity customers (m)1 +3% +3% 39.9 38.8 49.9 51.3 11.7 12.0 6.2 6.3 2.1 2.2 13.9 14.4 8.6 9.1 10.1 10.3 10.3 10.5 FY 2020 FY 2021 4.1 4.1 Thereof: gas customers (m)1 11.1 +3% 11.4 11.5 12.1 2.2 2.3 4.1 4.2 10.1 10.3
Slide 35: Non-Core business
Non-Core business E.ON FY 2021 results EBITDA1 Drivers €m +• Nuclear production rights agreement +75% Preussen (~€500m) 1,617 Elektra +• Higher availability of plants and higher market prices 925 Preussen 1,563 Turkey +• Higher achieved spark spreads Elektra Generation –• FX effects 895 Generation T
Slide 36: Adjusted Net Income
Adjusted Net Income €m FY 2020 FY 2021 % YoY EBITDA1 6,905 7,889 +14 Depreciation/amortization -3,129 -3,166 -1 EBIT1 3,776 4,723 +25 Economic interest expense (net) -1,078 -944 +12 EBT1 2,698 3,779 +40 Income Taxes on EBT1 -653 -880 -35 % of EBT 1 -24% -23% +4 Non-controlling interests -407 -396 +3
Slide 37: Reconciliation of EBITDA to IFRS Net Income
Reconciliation of EBITDA to IFRS Net Income €m FY 2020 FY 2021 % YoY 1 EBITDA 6,905 7,889 +14 Depreciation/Amortization/Impairments -3,129 -3,166 -1 1 EBIT 3,776 4,723 +25 Interest result -720 -553 +23 Net book gains 258 26 -90 Restructuring -656 -511 +22 Effects from derivative financial instrument
Slide 38: Cash-effective investments
Cash-effective investments €m FY 2020 FY 2021 % YoY Energy Networks 3,369 3,520 +4 Customer Solutions 803 710 -12 Corporate Functions & Other -273 238 +187 Consolidation -3 -4 -33 Non-Core 275 298 +8 Investments 4,171 4,762 +14 38
Slide 39: Economic Net Debt
Economic Net Debt1 €m 31 Dec 2020 31 Dec 2021 Liquid funds 4,795 5,965 Non-current securities 1,887 1,699 Financial liabilities -30,720 -32,730 Adjustment FX hedging2 82 391 Net Financial Position -23,956 -24,675 Provisions for pensions -8,088 -6,082 Asset retirement obligations -8,692 -8,016 Econom
Slide 40: Economic interest expense (net)
Economic interest expense (net) €m FY 2020 FY 2021 YoY Interest from financial assets/liabilities -1,012 -917 95 Interest cost from provisions for pensions and similar provisions -95 -63 31 Accretion of provisions for retirement obligation and similar provisions -9 -1 8 Construction period interests
Slide 41: END increase by strong investments in core business
END increase by strong investments in core business E.ON FY 2021 results Economic net debt – quarterly comparison €bn Asset Retirement Obligations (ARO) Pension provisions Net financial position -8.1 -8.0 -6.1 -6.0 -23.1 +0.7 -24.7 -37.2 -1.6 +0.4 -38.8 -1.0 END OCF Net Investments Pensions2 Collate
Slide 42: Bond maturities
Bond maturities E.ON FY 2021 results Bond maturities as of end FY 20211 €bn 16.2 Volume % Coupon 1.5 1.3 1.2 0.0% 1.1 5.9% 0.0% 0.0% 0.9 0.8 0.8 0.8 0.8 3.9% 5.7% 0.5 0.5 0.4% 0.8% 0.3 3.0% 0.0% 1.0% 1.0% 0.3% 5.5% 5.6% 0.9% 1.6% 5.5% Q3 Q4 Q1 Q2 Q4 Q1 Q2 Q3 Q2 Q4 Q2 Q4 >2026 2022 2022 2023 2023 202
Slide 43: Financial calendar & important links
Financial calendar & important links E.ON FY 2021 results Financial calendar May 11, 2022 Quarterly Statement: January – March 2022 May 12, 2022 2022 Annual Shareholder Meeting August 10, 2022 Half-Year Financial Report: January – June 2022 November 9, 2022 Quarterly Statement: January – September 2
Slide 44: E.ON's Investor Relations Team
E.ON‘s Investor Relations Team E.ON FY 2021 results Analysts & Institutional Investors Event & Roadshow Management Verena Nicolaus-Kronenberg Björn Siggemann Vanessa Brinkmann Head of Investor Relations Manager Investor Relations Assistant Investor Relations verena.nicolaus-kronenberg@eon.com bjoern
Slide 45: 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