Slide 1: Focused Disciplined Striving – H1 2016 results
Focused Disciplined Striving H1 2016 results 10 August 2016
Slide 2: Solid operating performance in challenging environment
Solid operating performance in challenging environment H1 2016 vs. H1 2015 H1 2016 Highlights €2.1 bn €2.0 bn EBIT1,2 up by ~€0.1 bn; Core EBIT1 up by ~€0.2 bn EBIT1 1.9 2.0 FY 16 Outlook confirmed H1 2015 H1 2016 Spin-off approved by AGM (99.7%) €0.8 bn BBB+ / Baa1 Rating affirmed €0.6 bn Underlyin
Slide 3: Spin-off approved by AGM
Spin-off approved by AGM 1 Jan 2016 E.ON and Uniper 26 Apr 2016 organizational separate Capital market day 8 Jun 2016 Carve-out Equity story, incl. effective strategy, KPIs, AGM decision September 2016 dividend policy, 99.7% Employees capital structure BaFin approval of Pre-Listing allocat
Slide 4: Energy Networks: regulatory update for Germany
Energy Networks: regulatory update for Germany Modernized incentive regulation ordinance Review of allowed return on equity (RoE) Final decision early August Allowed RoE for post 2005 investments in % 9.29 9.05 7.82 8.20 6.91 ? Consultation Determination 2008 2011 2016 Highlights Highlights Remova
Slide 5: Customer Solutions: Challenges in the UK
Customer Solutions: Challenges in the UK Competitive landscape CMA final report Number of suppliers and market shares B2C power & gas Published end of June 40 100% Market share (red line) Number of suppliers 30 20 50% Small & 10 Medium Large 2012 2013 2014 2015 2016 Source: Cornwall Energy Highlight
Slide 6: Renewables: We continue to deploy capabilities
Renewables: We continue to deploy capabilities Rampion Colbeck’s Corner 400 MW offshore windfarm in English Channel 200 MW onshore windfarm in Texas 1/3 of 116 mono-pile foundations already installed Fully operational since May 2016 Fully on track for completion in 2018 20th E.ON windfar
Slide 7: Key takeaways
Key takeaways Spin-off preparations nearing the finishing line; listing expected for September KFK discussions are progressing Core businesses well positioned but also exposed to competitive and regulatory dynamics especially in medium term perspective Future E.ON will continue to have absol
Slide 8: H1 2016 EBIT ~€100 million above previous year
H1 2016 EBIT ~€100 million above previous year EBIT1 H1 2016 vs. H1 2015 €m 2,122 113 131 214 2,001 53 1,908 131 73 H1 2015 Divested H1 2015 Energy Customer Renewables Corp. Preussen H1 2016 Operations w/o div. Networks Solutions Functions & Elektra operations Other, Consolidation 8 1. Adjusted for
Slide 9: Strong Customer Solutions result offsets Networks
Strong Customer Solutions result offsets Networks Energy Networks Customer Solutions EBIT1 € m -8% EBIT1 € m +25% 945 872 659 CEE & Turkey 186 183 528 204 Sweden 166 197 Other 135 218 291 UK Germany 593 492 Germany 175 164 H1 2015 H1 2016 H1 2015 H1 2016 Highlights Highlights Germany: Germany: -
Slide 10: Strong increase in offshore EBIT contribution
Strong increase in offshore EBIT contribution Renewables PreussenElektra EBIT1 € m EBIT1 € m -32% +26% 414 254 201 283 Offshore/Other 51 201 Onshore/Solar 150 53 H1 2015 H1 2016 H1 2015 H1 2016 Highlights Highlights Offshore: Lower volumes due to Grafenrheinfeld shut-down - Positive contribution
Slide 11: Underlying Net Income affected by high tax rate
Underlying Net Income affected by high tax rate H1 2016 € bn Group EBIT 2.0 Interest on 10% YoY improvement due to bond repayment in fin. assets/ 0.3 January liabilities Other interest 17% YoY weakening driven by valuation effects on expenses (incl. 0.5 other long-term provisions and lower interest
Slide 12: Cash conversion in line with guidance
Cash conversion in line with guidance H1 2016 € bn CCR1: 79% 0.1 2.9 0.5 2.3 0.1 0.1 0.3 0.3 1.6 0.4 1.3 0.7 EBITDA1 Non-cash Provision Changes Payments OCF bIT Interest Tax OCF Divest CAPEX FCF effective utilization in NOWC related to Payments Payments EBITDA non-op items earnings 12 1. Adjusted fo
Slide 13: END increasing mainly due to pension revaluation
END increasing mainly due to pension revaluation Economic Net Debt H1 2016 vs. FY 2015 € bn Others include: - €1 bn Nordstream 1 Transfer - €0.2 bn Uniper Capital Increase ARO -17.9 -18.1 ARO Pension Discount Rates: GER 1.4% vs. 2.7% UK 2.9% vs. 3.8% Cash Balance: -€0.7 bn 1.6 -1.3 Pensions -3.3 -1.
Slide 14: 2016 Outlook confirmed
2016 Outlook confirmed1 €4.6-5.0bn EBITDA €2.7-3.1bn EBIT Underlying €0.6-1.0bn Net Income 14 1. In transition year 2016 including at-equity contribution of Uniper on an underlying basis after assumed spin- off & deconsolidation; as of 2017 without Uniper contribution
Slide 15: E.ON Focus – our basis for steering the company
E.ON Focus – our basis for steering the company E.ON FOCUS – medium-term framework Capital structure BBB+ / Baa1 Profit Cash Return Growth Group EBIT1 Cash conversion ROCE3 EPS4 rate2 ≥ 80 % 8 – 10 % ≥ 5 - 10 % p.a. Dividend payout 40 – 60 % of Underlying Net Income closely linked to EPS and relativ
Slide 16: Backup
Backup
Slide 17: Financial Highlights
Financial Highlights €bn H1 2015 H1 2016 % YoY Sales 22.8 20.3 -11 1 EBITDA 3.3 2.9 -12 EBIT 1 2.1 2.0 -5 Underlying net income 0.8 0.6 -25 OCF bIT 2.3 1.9 -18 Investments 1.1 1.3 18 Economic net debt ² 27.7³ 25.5 -8 1. Adjusted for non operating effects 2. END FY 2015 refers E.ON going concern, END
Slide 18: Underlying Net Income
Underlying Net Income €m H1 2015 H1 2016 % YoY EBITDA 1 3,293 2,901 -12 Depreciation/amortization -1,171 -900 -23 EBIT 1 2,122 2,001 -6 Economic interest expense (net) -774 -810 5 EBT 1 1,348 1,191 -12 Income Taxes on EBT 1 -361 -456 26 % of EBT 1 -27% -38% - Non-controlling interests -151 -131 -13
Slide 19: From EBITDA to Net Income
From EBITDA to Net Income €m H1 2015 H1 2016 % YoY EBITDA 1 3,293 2,901 -12 Depreciation/Amortization/Impairments -1,171 -900 -23 EBIT 1 2,122 2,001 -6 Economic interest expense (net) -774 -810 5 Net book gains 302 -25 -108 Restructuring -118 -129 9 Mark-to-market valuation of derivatives -152 552 -
Slide 20: Energy Networks & Customer Solutions
Energy Networks & Customer Solutions Energy Networks €m Germany Sweden CEE & Turkey Total H1 2015 H1 2016 % YoY H1 2015 H1 2016 % YoY H1 2015 H1 2016 % YoY H1 2015 H1 2016 % YoY Revenue 6,297 7,002 11 501 509 2 833 811 -3 7,631 8,322 9 EBITDA 1 856 793 -7 249 279 12 286 286 0 1,391 1,358 -2 EBIT 1 5
Slide 21: Renewables & PreussenElektra
Renewables & PreussenElektra Renewables €m Onshore Wind / Solar Offshore Wind / Others Total H1 2015 H1 2016 % YoY H1 2015 H1 2016 % YoY H1 2015 H1 2016 % YoY Revenue 405 347 -14 199 333 67 604 680 13 EBITDA 1 260 172 -34 89 274 208 349 446 28 EBIT 1 150 53 -65 51 201 294 201 254 26 thereof Equity-
Slide 22: Cash effective investments by unit
Cash effective investments by unit €m H1 2015 H1 2016 % YoY Energy Networks 435 534 23 Customer Solutions 169 250 48 Renewables 457 473 4 Corporate Functions & Other 58 60 3 Consolidation 0 -5 - PreussenElektra 8 11 38 Investments 1,127 1,323 17 22 1. Adjusted for non operating effects
Slide 23: Economic Net Debt
Economic Net Debt €m 31 Dec 2015 30 June 2016 Liquid funds 8,190 7,178 Non-current securities 4,724 4,662 Financial liabilities -17,742 -14,081 1 Adjustment FX hedging 218 388 Net financial position -4,610 -1,853 Provisions for pensions -4,210 -5,574 Asset retirement obligations 2 -18,894 -18,072 Ec
Slide 24: Financial Liabilities
Financial Liabilities Split Financial Liabilities1 Maturity profile (as of end H1 2016)2 € bn € bn 4.4 30 June 2016 Bonds -12.0 EUR in EUR -4.7 GBP in GBP -4.1 USD YEN in USD -2.7 Other in CHF 0.0 2.7 in SEK 0.0 2.3 in JPY -0.2 in other denominations -0.3 1.4 Promissory notes -0.4 1.2 Commercial pap
Slide 25: Economic interest expense (net)
Economic interest expense (net) Difference €m H1 2015 H1 2016 (in € m) Interest from financial assets/liabilities -345 -311 35 Interest cost from provisions for pensions and similar provisions -40 -43 -3 Accretion of provisions for retirement obligation and similar provisions -400 -442 -42 Construct
Slide 26: E.ON Investor Relations contacts
E.ON Investor Relations contacts Florian Floßmann T+49 (201) 184 28 33 Head of Investor Relations florian.flossmann@eon.com Alexander Karnick T+49 (201) 184 28 38 Vice President Investor Relations alexander.karnick@eon.com Martina Burger T +49 (201) 184 28 07 Manager Investor Relations martina.burge
Slide 27: Financial calendar & important links
Financial calendar & important links Financial calendar November 9, 2016 Interim Report III: January – September 2016 March 15, 2017 Annual Report 2016 May 10, 2017 Interim Report I: January – March 2017 May 10, 2017 2017 Annual Shareholders Meeting August 9, 2017 Interim Report II: January – June 2
Slide 28: 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