Slide 1: H1 2017 Delivering step by step
H1 2017 Delivering step by step 9 August 2017
Slide 2: Delivering step by step … Highlights
Delivering step by step … E.ON 2017 H1 results Highlights Raising payout ratio to a minimum of 65%1 (specification of exact range with FY 2017 results) Striving for payout ratio in line with peers and absolute dividend growth Nuclear fuel tax refund paves way to potential over-achievement of leverag
Slide 3: Potential over-achievement of deleveraging could create balance sheet head room
Potential over-achievement of deleveraging could E.ON 2017 H1 results create balance sheet head room Economic net debt € bn 26.3 Debt Reduction 21.5 Debt reduction measures 1 + Monetization of Uniper shares ~3.1 NFT3 ~€2.85bn ~5.3x ABB ~€1.35bn 4 + Transfer of NS12 into CTA ~1.0 EBITDA ~4.5x + Nuc.
Slide 4: Raising payout and striving for dividend growth
Raising payout and striving for dividend growth E.ON 2017 H1 results Payout ratios by E.ON and peers Dividend policy: 80% • Raising payout ratio to a minimum of 65%2 Peer group1 • Striving for payout ratio in line with peers • Specification of exact range with full year 2017 65% results E.ON target
Slide 5: Energy Networks: multi-decade growth
Energy Networks: multi-decade growth E.ON 2017 H1 results Regulations and mega trends support multi decade growth RAB growth: potential for higher replacement capex on top of continuing network extensions Additional replacement and reinforcement investments Example: Power RAB in Germany Renewables b
Slide 6: CS: very good progress and growth also from asset-backed solutions
CS: very good progress and growth also from E.ON 2017 H1 results asset-backed solutions District Heating / B2M Strong district heating business in Sweden, Germany, UK with yearly EBIT of ~€130m Heat contributes ~20% of Customer Solutions EBIT Stable and resilient earnings profile often based on
Slide 7: Renewables: risk & return focus
Renewables: risk & return focus E.ON 2017 H1 results Focus on PPA and FiT secured pipeline US onshore Safe-harbored pipeline of > 3,000MW with 100% PTC support New project Stella (201MW) with FID expected in Q3-17 ~500 MW on track for completion in 2017 Europe onshore Opportunistic approach
Slide 8: Embedding operational excellence
Embedding operational excellence E.ON 2017 H1 results Phoenix ahead of schedule €400m Beyond Phoenix ~€300m Performance Culture to be sustainably embedded across all functions ~€30m ~€70m • Focus on operational excellence • Improve customer centricity H1 2017 H2 2017 2018 Total • Digitization to imp
Slide 9: Key takeaways
Key takeaways E.ON 2017 H1 results Raising payout ratio to a minimum of 65%1 (specification of exact range with FY 2017 results) Striving for payout ratio in line with peers and absolute dividend growth Nuclear fuel tax refund paves way to potential over-achievement of leverage target Strong alignme
Slide 10: H1 results & FY 2017 guidance
H1 results & FY 2017guidance
Slide 11: Strong Q2 2017 but H1 2017 EBIT still below prior year
Strong Q2 2017 but H1 2017 EBIT still below prior year E.ON 2017 H1 results EBIT1 H1 2017 vs. H1 2016 €m -205 2.001 154 1.972 -210 -29 -49 -88 -12 1.767 H1 2016 Divested H1 2016 w/o Energy Networks Customer Renewables Corp. Functions Preussen H1 2017 Operations div. operations Solutions & Other, Ele
Slide 12: Adjusted Net Income supported by lower accretion and taxes
Adjusted Net Income supported by lower accretion and E.ON 2017 H1 results taxes H1 2017 Group EBIT1 1.767 €m Interest on fin. assets/ -349 ~€ 40m deterioration YoY due to lower interest income liabilities2 Other interest ~€450m improvement mainly due to significant lower accretion of -34 expenses nu
Slide 13: END improves significantly due to high cash flow and capital increase
END improves significantly due to high cash flow and E.ON 2017 H1 results capital increase END1 H1 2017 vs. FY 2016 € bn +4.8 3.7 AROs Pension -21.4 provisions Net financial 0.3 0.2 -21.5 position 0.1 -1.3 1.35 -0.1 -0.5 -4.0 -3.7 4.9 -0.9 -21.5 -26.3 END FY 2016 OCF Investments ABB2 Dividend Divest
Slide 14: Nuclear decommissioning is no limitation for dividends or capex
Nuclear decommissioning is no limitation for dividends E.ON 2017 H1 results or capex € bn Current approach • Nuclear decommissioning provisions are part of E.ON’s economic net debt (END) Current ~0.4-0.6 • Utilization of nuclear provisions is currently part of operating cash flow and thus implies a
Slide 15: Outlook 2017 confirmed
Outlook 2017 confirmed E.ON 2017 H1 results Outlook 2017 Effects for H2 2017 Energy + Regulatory effects (e.g. pensions), lower €2.8-3.1 bn Networks maintenance costs + Tariff increase in Sweden + Positive development in CZ, HU EBIT1 Customer + Price increases in Germany & UK, focus on Solutions eff
Slide 16: E.ON Focus – Our basis for steering the company
E.ON Focus – Our basis for steering the company E.ON 2017 H1 results • Update of E.ON Focus with FY 2017 results • Increased payout ratio to minimum of 65%4 • Striving for payout ratio in line with peers (specification of exact range with FY 2017 results) • Target of absolute dividend growth (base y
Slide 17: Appendix
Appendix
Slide 18: Financial Highlights
Financial Highlights E.ON 2017 H1 results €bn H1 2016 H1 2017 % YoY Sales 20.3 19.6 -3 1 EBITDA 2.9 2.7 -6 1 EBIT 2.0 1.8 -12 Adjusted net income 1 0.6 0.9 +46 OCF bIT 2.3 5.3 +130 Investments 1.3 1.3 -1 Economic net debt ² 26.3 21.5 -18 1. Adjusted for non operating effects, 2. Economic net debt as
Slide 19: Cash conversion rate at 89% due to strong operational quarter
Cash conversion rate2 at 89% due to strong operational E.ON 2017 H1 results quarter H1 2017 € bn 5.3 4.9 -0.3 -0.1 -1.3 2.85 3.6 CCR2: 89% 2.7 2.4 0.0 -0.4 EBITDA1 Cash Changes OCF bIT adj. NFT refund OCF bIT Interest Tax Payments OCF Capex FCF Adjustments3 in WC NFT refund Payments 1. Adjusted for
Slide 20: Segments: Energy Networks
Segments: Energy Networks E.ON 2017 H1 results Energy Networks Highlights EBIT1 € m +18% • Germany: 1,026 + Regulatory effects 872 + Lower maintenance costs 606 • Sweden: Germany 492 + Tariff increases Sweden • CEE & Turkey: 197 239 CEE & Turkey 183 + Positive effects in Czech Republic, Hungary 181
Slide 21: Segments: Customer Solutions
Segments: Customer Solutions E.ON 2017 H1 results Customer Solutions Highlights EBIT1 € m • Germany: -32% – Lower power margins due to increased TSO fees 659 – Lower gas margin due to price decrease in Nov 2016 Germany 164 + Price increases in Q2 2017 449 86 • UK: UK 291 + Stabilizing customer numbe
Slide 22: Segments: Renewables
Segments: Renewables E.ON 2017 H1 results Renewables Highlights EBIT1 € m • Offshore: -19% – Arkona book gain in Q2 2016 254 – Low wind conditions in UK 205 • Onshore: Offshore/Other 201 + COD of Colbeck’s Corner in May 2016 128 + Higher production of US wind farms & better wind conditions in Europe
Slide 23: Segments: PreussenElektra
Segments: PreussenElektra E.ON 2017 H1 results PreussenElektra Highlights EBIT1 € m + Non-reoccurrence of nuclear fuel tax payments in Q2 2016 -4% + One-off effect from court case 283 271 – Lower volumes due to outages – Lower achieved power prices – ARC Depreciation Hedged Prices Germany (€/MWh) as
Slide 24: Adjusted Net Income
Adjusted Net Income E.ON 2017 H1 results €m H1 2016 H1 2017 % YoY 1 EBITDA 2,901 2,715 -6 Depreciation/amortization -900 -948 -5 1 EBIT 2,001 1,767 -12 Economic interest expense (net) -810 -383 +53 1 EBT 1,191 1,384 +16 Income Taxes on EBT 1 -456 -347 +24 % of EBT 1 -38% -25% - Non-controlling inter
Slide 25: From EBITDA to Net Income
From EBITDA to Net Income E.ON 2017 H1 results €m H1 2016 H1 2017 % YoY 1 EBITDA 2,901 2,715 -6 Depreciation/Amortization/Impairments -900 -948 -5 1 EBIT 2,001 1,767 -12 Economic interest expense (net) -810 -383 +53 Net book gains -25 273 +1,192 Restructuring -129 -177 -37 Mark-to-market valuation o
Slide 26: Cash effective investments by unit
Cash effective investments by unit E.ON 2017 H1 results €m H1 2016 H1 2017 % YoY Energy Networks 534 545 +2 Customer Solutions 250 209 -16 Renewables 473 528 +12 Corporate Functions & Other 60 27 -55 Consolidation -5 -2 +60 PreussenElektra 11 7 -36 Investments 1,323 1,314 -1 1. Adjusted for non oper
Slide 27: Economic Net Debt
Economic Net Debt1 E.ON 2017 H1 results Schematic END split after KFK payments • Amount of END unchanged €m 31 Dec 2016 30 June 2017 • Nuclear ARO’s and NFP are decreased by KFK Liquid funds 8,573 14,252 payment • Pension provisions and non nuclear AROs Non-current securities 4,327 3,850 unchanged F
Slide 28: Economic interest expense (net)
Economic interest expense (net) E.ON 2017 H1 results Difference €m H1 2016 H1 2017 (in € m) Interest from financial assets/liabilities -311 -349 -38 Interest cost from provisions for pensions and similar provisions -43 -41 +2 Accretion of provisions for retirement obligation and similar provisions -
Slide 29: Financial Liabilities
Financial Liabilities E.ON 2017 H1 results Split Financial Liabilities Maturity profile (as of end H1 2017)1 € bn € bn 4.8 30 June 2017 Bonds -12.6 in EUR -5.7 EUR in GBP -3.9 GBP in USD -2.6 2.1 USD 1.8 YEN in JPY -0.2 1.4 in other denominations -0.2 1.1 Other Promissory notes -0.4 0.8 0.6 0.4 Comm
Slide 30: E.ON Investor Relations contacts
E.ON Investor Relations contacts E.ON 2017 H1 results Alexander Karnick T+49 (201) 184 28 38 Head of Investor Relations alexander.karnick@eon.com Martina Burger T +49 (201) 184 28 07 Manager Investor Relations martina.burger@eon.com Conny Ripphahn T +49 (201) 184 28 34 Manager Investor Relations con
Slide 31: Financial calendar & important links
Financial calendar & important links E.ON 2017 H1 results Financial calendar November 8, 2017 Interim Report III: January – September 2017 March 14, 2018 Annual Report 2017 May 8, 2018 Interim Report I: January – March 2018 May 9, 2018 2018 Annual Shareholders Meeting August 8, 2018 Interim Report I
Slide 32: Disclaimer
Disclaimer E.ON 2017 H1 results 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 th