Slide 1: Creating the future of energy – H1 2019 Results
Growth Focus Discipline Creating the future of energy H1 2019 Results 7th August 2019
Slide 2: On track to deliver FY 2019 outlook
On track to deliver FY 2019 outlook E.ON H1 2019 results Highlights Key Financials1 €m € bn • EBIT down 12%, Adj. Net Income down 16% as 1,942 expected, compared to high base in H1 2018 1,717 20.2 • Economic Net Debt up €3.6 bn as a result of adoption of IFRS 16 and lower interest rates 1,052 16.6 •
Slide 3: Update on regulatory returns
Update on regulatory returns E.ON H1 2019 results Germany Nominal return • Lower returns reflect lower bond on equity (RoE) yields post trade tax1 • RFR2: 3.80% • RFR2: 2.49% 9.05% • E.ON also benefitting from lower • MRP3: 4.55% • MRP3: 3.80% 6.91% re-financing costs over time • Beta: 0.38 • Beta:
Slide 4: Improving and stabilizing retail business
Improving and stabilizing retail business E.ON H1 2019 results Customer numbers Growing customer base outside UK Performance programs on track • More than 100,000 additional ~22m ~22m customers in Germany and growth Cost ~€120m impact in Other driven by Italy with 30,000 additional customers Impact
Slide 5: First tranche of production rights for PreussenElektra secured – terms to be challenged
First tranche of production rights for PreussenElektra E.ON H1 2019 results secured – terms to be challenged E.ON Vattenfall Nuclear power plant 10 TWh Krümmel1 88 TWh of ~€27.8/MWh PreussenElektra remaining production rights Preliminary price 10 TWh Remaining October ’19 April ’20 June ’20 producti
Slide 6: Transaction update
Transaction update E.ON H1 2019 results Remedies offered to speed up transaction process • Decision by anti-trust authorities expected Czech Republic: in September 2019 • Divestment of innogy’s retail business • EBIT impact: low triple digit million • Integration project ongoing Germany: - First pha
Slide 7: Transaction steps
Transaction steps E.ON H1 2019 results 1st Closing (within 1-2 weeks after anti-trust approval) 2nd Closing – (a) 2nd Closing – (b) • Transfer of innogy shares from RWE to E.ON Transfer of E.ON’s Transfer of innogy’s • Capital increase at E.ON (RWE becomes 16.67% shareholder) renewables assets renew
Slide 8: Technical adjustments in E.ON's guidance after closing
Technical adjustments in E.ON’s guidance after closing E.ON H1 2019 results EBIT Adj. Net Income €2.9-3.1 bn Depreciation of Purchase Price Proportional Allocation (PPA) EBIT of innogy excluding EBIT of E.ON renewables, renewables & Kelag & gas PEL assets1 storage Technical adjustments2 €1.4-1.6 bn
Slide 9: EBIT development in line with expectations
EBIT development in line with expectations E.ON H1 2019 results EBIT1 H1 2019 vs. H1 2018 Key H1 Effects €m Energy +/– • Germany: new regulatory period power, H1 2018 1,942 Networks one-off effect in Q2 2018 +/– • Sweden: power tariff increase, adverse FX Energy development -31 Networks Customer +•–
Slide 10: Adj. Net Income reflecting EBIT development
Adj. Net Income reflecting EBIT development E.ON H1 2019 results H1 2019 €m Group EBIT1 1,717 Interest on Unchanged yoy: refinancing benefits compensated by fin. assets/ -292 higher interest charges following IFRS 16 adoption liabilities2 Other interest -43 expenses Profit before 1,382 Taxes1 Income
Slide 11: END impacted by technical and seasonal effects
END impacted by technical and seasonal effects E.ON H1 2019 results END1 H1 2019 vs. FY 2018 € bn -3.6 -10.3 AROs -10.3 Pension provisions Net financial position -3.3 Plan assets +€0.9bn Initial adoption of IFRS 16 DBO2 - €1.8bn leading to technical increase -4.0 Other +€0.2bn of Economic Net Debt -
Slide 12: FY 2019 outlook confirmed
FY 2019 outlook confirmed E.ON H1 2019 results Outlook 2019 Effects for the remainder of 2019 €2.9–3.1 bn Energy Networks Customer Solutions EBIT1 •+ Germany: new regulatory period power •+ Germany: impact of price adjustments •+ Sweden: power tariff increases •+ Germany & UK: restructuring charges
Slide 13: H1 2019 – Financial Appendix
Growth Focus Discipline H1 2019 – Financial Appendix E.ON standalone
Slide 14: Financial Highlights
Financial Highlights E.ON H1 2019 results €m H1 2018 H1 2019 % YoY Sales 15,356 16,089 +5 1 EBITDA 2,799 2,710 -3 EBIT 1 1,942 1,717 -12 1 Adjusted Net Income 1,052 885 -16 OCF bIT 2,068 1,467 -29 Investments 1,414 1,319 -7 Economic Net Debt ² -16,580 -20,201 -22 1. Adjusted for non operating effect
Slide 15: Seasonally low Cash Conversion Rate
Seasonally low Cash Conversion Rate2 E.ON H1 2019 results H1 2019 € bn 54% 2.7 -0.1 1.5 -1.1 -0.4 0.5 -0.6 -1.3 -0.8 EBITDA1 Cash Change in WC OCF bIT Interest Tax Payments OCF Capex FCF Adjustments3 Payments 1. Adjusted for non operating effects, 2. Cash Conversion Rate: OCF bIT ÷ EBITDA, 3. Net no
Slide 16: Segments: Energy Networks
Segments: Energy Networks E.ON H1 2019 results Energy Networks Highlights EBIT1 € m • Germany -3% +/– + New regulatory period for power 1,070 1,039 + Regulatory effects in 2018 – One-off effect in Q2 2018 Germany 565 543 • Sweden + Power tariff increase Sweden 254 262 – Adverse FX development CEE &
Slide 17: Segments: Customer Solutions
Segments: Customer Solutions E.ON H1 2019 results Customer Solutions Highlights EBIT1 € m • Germany Sales -50% – Timing effect from delayed pass-on of higher grid fees 477 – Higher procurement costs for gas Germany Sales 135 • UK – Regulatory effects, mainly SVT2 price cap 240 UK 202 – Competitive d
Slide 18: Segments: Renewables
Segments: Renewables E.ON H1 2019 results Renewables Highlights EBIT1 € m +17% • Offshore/Other + GE: Capacity additions (Arkona) 275 + UK: Capacity additions (Rampion) 236 • Onshore/Solar 215 + US: Capacity additions (Stella) Offshore/Other 163 – Support scheme expiries – Price effects Onshore/Sola
Slide 19: Non-Core business
Non-Core business E.ON H1 2019 results Non-Core Highlights EBIT1 € m • PreussenElektra +9% + Higher achieved power prices – Higher depreciation 224 245 – Plant outages in 2019 – One-off effects in 2018 Preussen 182 • Generation Turkey 244 Elektra + Operational improvements, mainly higher hydro volum
Slide 20: Adjusted Net Income
Adjusted Net Income E.ON H1 2019 results €m H1 2018 H1 2019 % YoY EBITDA 1 2,799 2,710 -3 Depreciation/amortization -857 -993 -16 1 EBIT 1,942 1,717 -12 Economic interest expense (net) -330 -335 -2 EBT 1 1,612 1,382 -14 1 Income Taxes on EBT -402 -345 +14 1 % of EBT -25% -25% - Non-controlling inter
Slide 21: Reconciliation of EBIT to IFRS Net Income
Reconciliation of EBIT E.ON H1 2019 results to IFRS Net Income €m H1 2018 H1 2019 % YoY EBITDA 1 2,799 2,710 -3 Depreciation/Amortization/Impairments -857 -993 -16 1 EBIT 1,942 1,717 -12 Reclassified businesses of Renewables -227 -266 -17 Interest result -294 -435 -48 Net book gains 855 19 -98 Restr
Slide 22: Cash effective investments
Cash effective investments E.ON H1 2019 results €m H1 2018 H1 2019 % YoY Energy Networks 580 643 +11 Customer Solutions 209 343 +64 Renewables 449 293 -35 Corporate Functions & Other 16 37 +131 Consolidation -3 -1 +67 Non-Core 163 4 -98 Investments 1,414 1,319 -7 22
Slide 23: Economic Net Debt
Economic Net Debt1 E.ON H1 2019 results €m 31 Dec 2018 30 Jun 2019 Liquid funds 5,423 2,659 Non-current securities 2,295 2,680 Financial liabilities -10,721 -11,336 Adjustment FX hedging ² -28 62 Net financial position -3,031 -5,935 Provisions for pensions -3,261 -3,958 Asset retirement obligations
Slide 24: Economic interest expense (net)
Economic interest expense (net) E.ON H1 2019 results Difference €m H1 2018 H1 2019 (in € m) Interest from financial assets/liabilities -293 -292 +1 Interest cost from provisions for pensions and similar provisions -31 -30 +1 Accretion of provisions for retirement obligation and similar provisions -4
Slide 25: Financial Liabilities
Financial Liabilities E.ON H1 2019 results Liquidity Sources (as of H1 2019) Maturity profile (as of end H1 2019)2 € bn € bn 4.8 Liquid funds1 ~2.6 Non-current securities ~2.7 Total ~5.3 Syndicated loan (undrawn) 2.75 1.4 0.9 € / $ Commercial Paper 0.8 10 / 10 0.6 programs (undrawn) 0.4 0.1 0.0 Acqu
Slide 26: Funding plan to include green bonds
Funding plan to include green bonds E.ON H1 2019 results E.ON’s Green Bond Framework Financing considerations recently established • Estimated future funding needs: We strive to implement Green Bonds in €2-4 billion annually our funding mix going forward • €1.75 billion undrawn acquisition (estimate
Slide 27: E.ON Investor Relations contacts
E.ON Investor Relations contacts Dr. Stephan Schönefuß T +49 (201) 184 28 22 Interim Head of Investor Relations stephan.schoenefuss@eon.com Martina Burger T +49 (201) 184 28 07 Manager Investor Relations martina.burger@eon.com Sebastian Gaßner T +49 (201) 184 28 05 Manager Investor Relations sebasti
Slide 28: Financial calendar & important links
Financial calendar & important links Financial calendar November 13, 2019 Quarterly Statement: January – September 2019 March 25, 2020 Annual Report 2019 May 12, 2020 Quarterly Statement: January – March 2020 May 13, 2020 2020 Annual Shareholders Meeting August 12, 2020 Half-Year Financial Report: J
Slide 29: 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