E.on Se · XETR:EOAN
E.on — Investor Presentation (August 2021)
94 slides from E.on's investor presentation, August 2021
Slide 1: Capital Markets Story August 2021
Capital Markets Story August 2021 including H1 2021 financials
Slide 2: Our purpose
Our purpose Energy fuels human progress. At E.ON, we’re doing everything we can to make the future better and to enable our networks and energy solutions to connect people with one another.
Slide 3: E.ON business model fully focused on the energy transition
E.ON business model fully focused on the energy transition Non-Core activities Core activities: Customer centric energy infrastructure Up-stream & Power & Gas Supply Power Generation distribution business E.ON fully focusing on the energy transition Employees 2020 Dividend per share 2020 Group EBIT
Slide 4: E.ON's two core businesses
E.ON’s two core businesses Energy Networks Customer Solutions ~€35bn Regulated Asset Base ~53m customers across Europe2 Germany €22.4bn Germany 13.9m Sweden €4.8bn UK 10.3m3 CEE & Turkey €7.7bn1 Other ~28m ~78 GW renewables capacity ~33% of adj. EBIT4 from decentral connected to E.ON networks energy
Slide 5: Table of contents
Table of contents 1 H1 2021 update ………………..……………..……………………………………………………… 6 2 Investment highlights ……………………...……………………………………………………… 22 3 Appendix ……………………………...……………………………………………………………………… 48
Slide 6: H1 2021 update
H1 2021 update
Slide 7: Positive momentum with guidance adjustment
Positive momentum with guidance adjustment Highlights H1 key financials1 2021 FY guidance update €bn Strong performance in H1 2021 Group EBITDA1 €7.6-7.8bn Excellent operations including progress on (€7.2-7.4bn) synergies and normalized weather 3.2 Technical adjustment of FY 2021 guidance 2.2 EBIT1
Slide 8: Progress on our key priorities
Progress on our key priorities Sustainability Digitalization Growth • Ecological grid corridor • IT renewal on track: increasing • European ‘Fit for 55’: focus management: ~70,000 hectares focus on cloudification themes fully support E.ON’s along our high-voltage lines to growth ambitions become bio
Slide 9: Energy Networks Germany: initial proposal for return on equity published
Energy Networks Germany: initial proposal for return on equity published Allowed German pre-tax RoE1 for new assets First assessment • Proposed RoE is not sufficient to support investment needs for energy transition 6.91% • Proposal is not competitive in an international context • Market risk premiu
Slide 10: Customer Solutions: increased demand for sustainable offerings
Customer Solutions: increased demand for sustainable offerings Energy Infrastructure Solutions (EIS) Future Energy Home (FEH) FY 2021 outlook H1 2021 vs. H1 2020 ~€500m capex +~30% revenue >€200m EBIT1 +€30m EBIT1 1. Adjusted for non-operating effects 10
Slide 11: Significant EBIT growth in all segments
Significant EBIT growth in all segments EBIT1 Key drivers €m +• Covid-19 impact in 2020 H1 2020 2,185 Energy +/–• Germany: normalized weather/ Networks regulatory cycle Energy Networks +125 +• CEE & Turkey: Slovakia - inclusion of VSEH2 Customer Solutions +358 + • Covid-19 impact in 2020 +978m Custo
Slide 12: Adjusted Net Income amplified by lower refinancing costs and tax
Adjusted Net Income amplified by lower refinancing costs and tax H1 2021 €m vs. H1 2020: Group EBIT1 3,163 +45% Economic -496 interest result Profit 2,667 before Taxes1 Income taxes -614 Tax rate at ~23% Minorities -288 vs. H1 2020: Adjusted Net Income1 1,765 0.68 EPS (€ per share) +86% 1. Adjusted
Slide 13: END unchanged despite high investments and dividend payment
END unchanged despite high investments and dividend payment €bn -8.6 Asset Retirement Obligations (ARO) -8.7 Pension provisions Net financial position -6.4 -8.1 -25.9 -24.0 +1.2 +1.7 +0.1 -40.7 -1.5 -40.9 -1.6 END OCF Net Investments Pensions2 Dividends Other END FY 2020 H1 2021 H1 20211 (incl. AROs
Slide 14: Upgraded Group guidance 2021 due to nuclear production rights agreement
Upgraded Group guidance 2021 due to nuclear production rights agreement Group guidance EBITDA1: €7.6-7.8bn EBIT1: €4.4-4.6bn ANI1: €2.2-2.4bn (€7.2-7.4 bn) (€3.8-4.0bn) (€1.7-1.9bn) Segment guidance1 Energy Networks Customer Solutions Non-Core EBITDA: €5.0-5.2bn ✓ EBITDA: €1.4-1.6bn ✓ EBITDA: €1.2-1
Slide 15: Mid-term delivery plan confirmed
Mid-term delivery plan confirmed Dividend per share (DPS) growth up to 5% p.a. Group EBIT1 growth Group EPS growth 1 8-10%2 CAGR 12-14%2 CAGR Average cash conversion Capital structure with strong rate3of 100% BBB/Baa rating 1. Adjusted for non-operating effects, 2021-2023. 2. Based on FY 2021 guidan
Slide 16: Guidance overview
Guidance overview Change vs. May 2021 €bn FY 2020 2021 2021-2023 EBITDA1 6.905 7.6-7.8 2-3%2 CAGR Energy Networks 5.199 5.0-5.2 Customer Solutions 1.006 1.4-1.6 Non-Core 0.925 1.2-1.4 Corporate Functions & Other -0.225 ~-0.2 EBIT1 3.776 4.4-4.6 8-10%2 CAGR Core EBIT 3.363 11-13% CAGR Energy Networks
Slide 17: Investment highlights
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Slide 18: Why invest in E.ON?
Why invest in E.ON? 1 We commit to a sustainable dividend per share growth of up to 5% annually until 2023 and further growth beyond Dividend growth 2 We are the green investment opportunity and we enable the energy transition Customer centric energy infrastructure 3 We focus on customer centric ene
Slide 19: We commit to annually grow the dividend, also beyond 2023
We commit to annually grow the dividend, also beyond 2023 Dividend per share € 0.43 0.46 0.47 0.30 0.21 2016 2017 2018 2019 2020 2021 2022 2023 Growth beyond ✓ We delivered… …and will continue to deliver 19
Slide 20: Why invest in E.ON?
Why invest in E.ON? Dividend growth Customer centric energy infrastructure Sustainability Performance 20
Slide 21: Net zero is the new normal – E.ON is driving carbon reduction
Net zero is the new normal – E.ON is driving carbon reduction Global challenges E.ON’s contribution Focus SDGs5 IPCC1 long term goal to limit global Avoided emissions together with our clients warming to 1.5°C 2020: ~100m tons CO2 German greenhouse gas emissions to be cut One out of five renewable b
Slide 22: Achievements across all sustainability dimensions
Achievements across all sustainability dimensions CO2 7% reduction in Scope 1 & 2 & 2020: Significant progress in integrating ~100m tons of CO2 avoided with our clients climate & non-financial risks 80-85% EU taxonomy aligned capex (2021-23)1 ✓ Reporting integrated >65% German onshore & >50% German
Slide 23: We take sustainability as our guiding principle
We take sustainability as our guiding principle WE enable Europe to become carbon WE foster a diverse and neutral inclusive culture -75%1 by 2030 CO2 Scope 1 & 2 -100%1 by 2040 32% proportion of women in management positions2 Scope 3 -50%1 by 2030 -100%1 by 2050 WE care for our people Reduction of s
Slide 24: 80-85% of investments aligned with EU taxonomy
80-85% of investments aligned with EU taxonomy Investments 2021 Investments 2021-2023 €bn €bn ~80% 80-85% EU taxonomy EU taxonomy ~4.91 aligned2 ~141 aligned2 Energy Networks Customer Solutions Other3 1. Cash-effective investments including Corporate Functions & Other and Non-Core 2. Based on EU tax
Slide 25: Decentralization means digitalization and efficiency potential
Decentralization means digitalization and efficiency potential The complexity within DSOs is increasing ... Decentralization drives system complexity E.ON provides digital solutions to capitalize on it Energy Management System Regional Energy Market EnergieMonitor & Klima-Navi Customer Smart Home Tr
Slide 26: Why invest in E.ON?
Why invest in E.ON? Dividend growth Customer centric energy infrastructure Sustainability Performance 26
Slide 27: Infrastructure is at the heart of E.ON's capital allocation
Infrastructure is at the heart of E.ON’s capital allocation ~10% Energy Retail Customer Solutions1 retail2 investments4 Decentral energy infrastructure3 ~90% Infrastructure Energy Networks1 Regulated energy networks investments4 1. IFRS segments used in external reporting 2. Includes Energy Sales an
Slide 28: Energy transition driving multi-decade investment opportunities
Energy transition driving multi-decade investment opportunities Industry investments in German power distribution networks excluding Green Deal upside €bn Drivers 6.7 4.7 2.5 2010 2009 2020 2030 2050 Source: Historic values: Bundesnetzagentur Monitoringbericht 2019. Future outlook: dena-Leitstudie I
Slide 29: E.ON is the leading energy network company in Northern and Central Europe
E.ON is the leading energy network company in Northern and Central Europe E.ON Regulated Asset Base (RAB) – regional split €bn Total RAB1, 2 34.9 Sweden Germany CEE3,4 &Turkey4 Power RAB Gas RAB 4.8 22.4 7.7 1. RAB is the value of all distribution assets determined by the regulator. In general, RABs
Slide 30: Long-term RAB growth with further upside potential
Long-term RAB growth with further upside potential E.ON Regulated Asset Base1 growth €bn Power 34.9 4-5% • Multi-decade growth potential CAGR2 stemming from mega-trends Gas Power 29.4 • Optimizing our existing gas asset base with limited investment needs • Future growth option from hydrogen Gas 5.5
Slide 31: Three years of regulatory stability
Three years of regulatory stability Regulatory periods per country 2021 2022 2023 2024 2025 2026 2027 2028 Germany (Gas) Slovakia1 Poland2 Turkey Czech Republic Hungary3 Romania ~90% of the Energy Networks Germany (Power) EBIT4 is highly visible until 2024 Sweden 1. Length of upcoming regulatory per
Slide 32: We successfully manage regulatory reviews
We successfully manage regulatory reviews Regulatory updates in CEE & Turkey from 20211 onwards new WACC: Adjusted RAB CZ -1.4pp ~6.5% (nominal) Increased eligible Capex and Opex new WACC: HU -1.3pp ~3.4% (real) Introduction of regulatory account in Earnings Poland successfully new WACC: Bonus WACC
Slide 33: Energy Networks Germany - Earnings components
Energy Networks Germany - Earnings components Illustrative average EBITDA1 split (2020-2023) Illustrative average EBIT1 split (2020-2023) Regulated return Regulated return and depreciation2 0 - 10% and depreciation2 0 - 15% ~30% ~10% ~35% ~10% ~50% ~60% ~10% ~15% ~10% ~15% Regulated income Regulated
Slide 34: Exemplary earnings components – more than return on RAB
Exemplary earnings components – more than return on RAB Illustrative EBIT composition1,2 Additional businesses / CAPEX driven Performance driven Timing and other effects Other 70% - 80% 5% - 10% 5% -10% ~5% Base allowed Depreciation OPEX performance & Timing effects Other Additional Other EBIT Energ
Slide 35: Impact of rising interest rates and inflation on regulated earnings
Impact of rising interest rates and inflation on regulated earnings Time horizon Impact of increasing interest rates and inflation • Allowed WACCs/RoE are usually adjusted only once per regulatory period Short-term • Inflation-indexation in most countries with t+2 time-lag • Allowed WACCs/RoE to gra
Slide 36: Key events for upcoming 4th German electricity network regulation period
Key events for upcoming 4th German electricity network regulation period July 2021 August 2021 BNetzA has published the Public consultation in preliminary decision on the written form until RoE together with the 25th August consultancy opinion laying out a minimum value of 4.59% Q1 2021 Q2 2021 Q3 2
Slide 37: Energy Infrastructure Solutions (EIS)
Energy Infrastructure Solutions (EIS) Core part and growth driver of Customer Solutions Core regions Growth regions Customers >1.5 m # of plants ~4,100 Heat, chill & steam production ~19 TWh Electricity production ~12 TWh Heat, chill, steam grids ~5,000 km Sales 2020 ~€2bn EBIT CAGR 2021-2023 ~15% S
Slide 38: EIS provides energy solutions to four customer segments
EIS provides energy solutions to four customer segments based on three business models Core customer Public & Real estate Commercial Industry segments municipal entities Core solutions Solutions Energy Waste heat Local energy Digital Heat Cooling Power efficiency recovery networks services E-mobilit
Slide 39: Future Energy Home (B2C Solutions)
Future Energy Home (B2C Solutions) New growth area in Customer Solutions 2020 actuals Future Energy Home regions Hardware devices1 installed ~100k Service & maintenance contracts >1.2m Yearly CO2 savings2 >325 kt E.ON Home app customers3 >10,000 Sales 2020 ~€0.7bn EBIT CAGR 2021-2023 >25% Market lea
Slide 40: Future Energy Home and eMobility enable customers to reduce their CO2 footprint
Future Energy Home and eMobility enable customers to reduce their CO2 footprint with sustainable energy solutions PV & Storage PV & Storage Sale and installation of PV & battery with service/energy bundles E.ON Home App Battery sales more than doubled in 2020 EV charging Home Heating Home Heating Sa
Slide 41: Customer numbers B2B & B2C
Customer numbers B2B & B2C Customer accounts (m)1 Thereof: electricity customers (m)1 0% 41.0 0% 41.1 52.1 52.1 11.7 11.7 6.2 6.1 2.2 2.2 13.9 14.0 10.8 10.9 10.1 10.2 10.3 10.0 FY 2020 H1 2021 4.1 4.1 Thereof: gas customers (m)1 11.1 0% 11.0 13.7 13.8 2.2 2.3 4.1 3.9 10.1 10.2 1.9 1.9 2.9 2.9 FY 20
Slide 42: Why invest in E.ON?
Why invest in E.ON? Dividend growth Customer centric energy infrastructure Sustainability Performance 42
Slide 43: Synergy delivery fully on track
Synergy delivery fully on track Net synergy targets1 Synergy delivery by division €m ~780 ~740 ~310 29% 52% 130✓ 40✓ 19% 2019 2020 2021 2022 2023 2024 Customer Solutions ✓ Transaction completely digested Energy Networks ✓ Central voluntary leave program successfully concluded Central Functions, IT a
Slide 44: UK transformation ahead of plan
UK transformation ahead of plan 2020 2021 2022 Migration of npower B2C + SME ✓ Wind down npower operations Migration of E.ON UK B2C + SME Ramp up of E.ON Next Key achievements Priorities for 2021 • npower wind down in last stage • Wind down all npower operations • All npower customer accounts migrat
Slide 45: Renewal of IT architecture to drive operational excellence in Customer Solutions
Renewal of IT architecture to drive operational excellence in Customer Solutions Germany: Substantial ramp up of contracts to digital platform UK: Over 4mn accounts now migrated to the E.ONnext platform million contracts of E.ON core brand million accounts All UK accounts >8 migrated ~6.5 >5.1 ✓ >4.
Slide 46: E.ON's performance culture adds sustainable value
E.ON’s performance culture adds sustainable value to businesses and customers German power network efficiency scores Sweden power network efficiency scores >€600m additional revenues 100% in regulatory period1 E.ON grids 100% Very efficient 85% 95% Industry average 94% Efficient 70% 8/9 E.ON grids 1
Slide 47: Financial Update
Financial Update 47
Slide 48: Strict capital allocation framework leads to sound investment profile
Strict capital allocation framework leads to sound investment profile Sustainability focus Return framework Capital allocation in line with business priorities Sustainability criteria: Hurdle rate composition: Indicative hurdle rates2: ✓ Enable energy transition WACC (country & technology specific)
Slide 49: Regulated earnings split
Regulated earnings split share EBITDA 20201 €bn regulated • Regulated or quasi Earnings share of ~77% ~77% (Quasi-)regulated earnings strong • Network operations in countries with 6.9 regulatory frameworks • Customer Solutions and Energy Networks Energy Networks Customer Solutions Other2 diversified
Slide 50: E.ON allocates ~90% of investments to infrastructure
E.ON allocates ~90% of investments to infrastructure Investments 2021 Investments 2021-2023 €bn €bn ~90%2 ~90%2 infrastructure infrastructure ~4.91 ~141 Energy Networks Customer Solutions Other3 1. Cash-effective investments including Corporate Functions & Other and Non-Core 2. Based on investments
Slide 51: Investments in Customer Solutions also with strong focus on infrastructure
Investments in Customer Solutions also with strong focus on infrastructure Energy Networks 2021-2023 Customer Solutions 2021-2023 €bn €bn 100% ~70% ~10.51 infrastructure ~2.81 infrastructure B2B Solutions IT driven retail investments City Energy Solutions New Solutions Power Gas Other UK smart meter
Slide 52: Networks Capex breakdown 2021-2023
Networks Capex breakdown 2021-2023 Germany Sweden CEE €bn €bn €bn 7.31 1.21 2.01 ~55% ~50% ~60% investment in expansion investment in expansion investment in expansion Maintenance Grid expansion Other 1. Cash-effective investments 52
Slide 53: Attractive Group earnings growth driven by core business
Attractive Group earnings growth driven by core business EBIT1 Mid-term outlook core EBIT1 €bn CAGR 4.4-4.6 3.8 0.4 3.3 11-13% Core CAGR 2020 2021 2022 2023 2021-2023 Guidance: Core Non-Core2 1. Adjusted for non-operating effects 2. In 2023 Non-Core consists of Enerjisa Üretim only – no production o
Slide 54: Earnings growth resulting from both Energy Networks and Customer Solutions
Earnings growth resulting from both Energy Networks and Customer Solutions Energy Networks EBIT1 Mid-term outlook1 Customer Solutions EBIT1 Mid-term outlook1 €bn €bn 0.8-1.0 3.3 2.9-3.1 0.7 0.5 0.4 0.1 0.1 2.2 0.4 2020 2021 2021-2023 -0.1 2021 2021-2023 2020 Guidance: Germany Sweden CEE & Turkey Gui
Slide 55: Strong double digit EPS growth
Strong double digit EPS growth Adjusted Net Income1 Earnings per share1 Mid-term outlook1 2 €bn € CAGR 2.2-2.4 1.6 0.63 0.84-0.92 Payout 12-14% ratio 76% 2020 2021 2020 2021 2021-2023 Refinancing benefits until 2023 of ~€150m3 1. Adjusted for non-operating effects 2. Based on FY 2021 guidance exclud
Slide 56: Clear set of deleveraging measures
Clear set of deleveraging measures Economic Net Debt €bn FY 2020 “Beat the -8.7 • Further outperform the provisions by ~€0.5bn until 2022 provisions” “Focus on the • Asset performance to outperform the liability -8.1 long end” • Interest rate sensitivity of GER pensions1: +50bps → - ~€1.5bn • Workin
Slide 57: Accelerated progress towards debt factor target of 4.8x – 5.2x
Accelerated progress towards debt factor target of 4.8x – 5.2x Debt factor1 Guidance range for 5.9x debt factor of 4.8x-5.2x in line with rating target Strong 5.2x BBB/Baa rating target 4.8x 2020 2021 2022 2023 1. Economic Net Debt/EBITDA, EBITDA adjusted for non-operating effects. Based on interest
Slide 58: Dividend commitment fully in line with deleveraging
Dividend commitment fully in line with deleveraging EPS1 2 above DPS growth… …lowers payout ratio… … allowing deleveraging and sustainable dividend growth 5.9x Strong BBB/Baa rating target 76% Payout ratio 4.8x - 5.2x 2021 2022 2023 2020 2023 2020 2022 2023 1. Adjusted for non-operating effects 2. B
Slide 59: Funding strategy
Funding strategy 2021 expected below annual range Volumes €2-4bn p.a. • Bond refinancing • Cash utilization of asset retirement obligations Tenors 3-12 years preferred • Optimize maturity profile and interest costs • Redemptions on any single day capped at €1bn Green bonds >50% • Going forward, majo
Slide 60: Bond maturities
Bond maturities Bond maturities as of end H1 20211 €bn 17.2 Refinancing benefits Volume % Coupon until 2023 of up to 1.5 ~€150m2 1.3 1.2 1.0 5.7% 0.0% 1.1 5.9% 5.6% 0.9 0.8 0.8 0.7 0.0% 3.9% 0.5 6.5% 0.4% 0.8% 0.3 0.0% 3.0% 0.0% 1.0% 1.0% 5.5% 0.9% 5.5% Q3 Q3 Q4 Q1 Q2 Q4 Q1 Q2 Q3 Q2 Q4 >2025 2021 20
Slide 61: Benchmark bonds of E.ON Group as of August 11, 2021
Benchmark bonds of E.ON Group as of August 11, 20211 Volume in millions in Volume in millions in Issuer respective currency Coupon Maturity Issuer respective currency Coupon Maturity E.ON International Finance B.V. 1,000 EUR 6.500% Aug-21 E.ON SE 500 EUR 0.750% Feb-28 E.ON International Finance B.V.
Slide 62: Maintaining a substantial liquidity buffer is a cornerstone of risk management
Maintaining a substantial liquidity buffer is a cornerstone of E.ON’s risk management • €1.5bn in cash & equivalents Key takeaways Large volume of • €1.2bn in short-term securities liquidity1 • €1.8bn of non-current securities • Early refinancings successfully completed Bond refinancing Liquidity ri
Slide 63: New Green Bond Framework overview
New Green Bond Framework overview: Framework structure in line with draft EU Green Bond Standard Process for selection Green assets & Management of External of green green assets Reporting capex use-of-proceeds + and capex verification • All projects directly • E.ON strives to maintain a • Annual re
Slide 64: Green Bond asset and capex categories
Green Bond asset and capex categories Electricity Networks (DSO) Renewable Energy Energy Efficiency Clean Transportation All distribution infrastructure Renewable energy production Integrated on-site business EV charging stations and and equipment in the inter- and storage including3 and city energy
Slide 65: PreussenElektra – Further ambition to 'beat the provisions'
PreussenElektra – Further ambition to ‘beat the provisions’ Solid track-record already until 2020 Nuclear Asset Retirement Obligations1 • Bundling of decommissioning activities €bn 2016 2017 2018 2019 2020 • Procurement successes by ‘convoy approach’ • Operational progress according to plan Further
Slide 66: Appendix
Appendix 66
Slide 67: E.ON business segmentation
E.ON business segmentation IFRS reporting divisions Energy Networks Customer Solutions Corporate Non-Core Functions & DE SWE CEE1 & TR DE UK Benelux2 Other3 PE4 TR Gen5 Other Power grid Energy Energy sales and Gas grid Infrastructure services Solutions (EIS) New Additional businesses Solutions Regul
Slide 68: Climate targets and progress on GHG emissions
Climate targets and progress on GHG emissions E.ON‘s commitment E.ON‘s progress Climate targets communicated GHG emissions development (million metric tons) Scope 1 Scope 2 Scope 3 -10% Scope -75%1 by 2030 120.1 108.1 1&2 -100%1 by 2040 -7% -8% 4.8 44.3 4.5 41.8 3.9 3.6 1.9 70.8 61.3 1.8 4.5 4.2 1.9
Slide 69: Sustainability reporting 2020
Sustainability reporting 2020 Integration Sustainability Report 2020 will Successful integration in content and data collection process innogy be fully consolidated reporting 2019 2020 • In 2020 we intensified our efforts to manage the interface between sustainability Risk Significant progress in in
Slide 70: E.ON's sustainability ratings
E.ON‘s sustainability ratings Rating: AA Text 1 Rated on a AAA to CCC scale High relative performance E.ON listed on ESG Risk Rating: 18.2 (low risk) Text 1 Rated on a 0 to 40+ scale Rank 3 out of 62 in subindustry group Rating: 61 Scored on a 0 to 100 scale Text 1 Rank 19 out of 61 in industry grou
Slide 71: Building blocks of allowed revenues in Germany
Building blocks of allowed revenues in Germany Schematic illustration for 2020 (power & gas) €bn ~21.2 Gas ~1.1 (New) Totex indexed to Gas ~3.4 CPI and subject to Thereof: Thereof: (Old) general and individual ~4.0 power ~8.5 power efficieny targets ~0.7 gas ~1.1 gas Power ~10.2 (New) ~9.6 ~4.7 ~6.5
Slide 72: Upcoming regulatory events in the next years
Upcoming regulatory events in the next 3 years SWE Q3 GER January Determination of Regulatory review efficiency factor power PL Start of new regulatory period PL for start of new (general & individual) for (possible shift to 2023) period in 2024 April October / 4th reg. period by November BNetzA POW
Slide 73: Continuous improvement in operative performance increases security of supply
Continuous improvement in operative performance increases security of supply SAIDI1,2 2019 vs. 2020 Power losses5 2019 vs. 2020 Germany Germany TWh -12 % -1 % 25.0 22.0 7.26 7.1 2019 2020 2019 2020 Sweden Sweden TWh 122.0 +20 %3 146.0 0% 1.1 1.1 2019 2020 2019 2020 CEE4 CEE7 TWh 214.0 -14 % 184.0 -8
Slide 74: RAB growth further supported by local drivers
RAB growth further supported by local drivers Power RAB development Local drivers €bn 3-5% CAGR • Renewable connections Germany1 17.8 • Major customer projects • Digitalization /modernization 2020 2023 3-5% CAGR • Storm proofing Sweden2 4.8 • Renewable connections • Demand growth 2020 2023 8-10% CAG
Slide 75: Leveraging strong partnerships and core competencies to drive additional businesses
Leveraging strong partnerships and core competencies to drive additional businesses Long-term partnerships with municipalities … … create a competitive edge for additional businesses Technical grid services Smart meters Non-concession- Concession- based RAB based RAB e.g. O&M e.g. installation ~1/3
Slide 76: Network charges are only a small portion of German power price
Network charges are only a small portion of German power price Composition of average electricity price1 Decarbonization currently not optimally supported, electricity disadvantaged • Renewables surcharge to be borne by more customers Electricity Renewable • Carbon minimum price or tax procurement,
Slide 77: Settlement of all material remaining nuclear lawsuits at favorable terms
Settlement of all material remaining nuclear lawsuits at favorable terms Agreement on costs for production rights 48 TWh €0/MWh 13 TWh € 181m 77
Slide 78: Upgraded outlook 2021 due to nuclear production rights agreement
Upgraded outlook 2021 due to nuclear production rights agreement Non-core FY2021 outlook 1 Key takeaways EBITDA EBIT • Proposal on the agreement of the use of nuclear €bn €bn production rights adopted by all necessary legislative bodies in June 2021 1.2-1.4 • EBITDA impact of ~€0.4bn in 2021 0.8-1.0
Slide 79: H1 2021 Results Financial Appendix
H1 2021 Results Financial Appendix
Slide 80: Segment outlook 2021 remaining year
Segment outlook 2021 remaining year EBIT1 key drivers H2 2021 Energy Networks Customer Solutions Non-Core +• Covid-19 impact in 2020 +• Covid-19 impact in 2020 PreussenElektra: +• Lower depreciation from purchase Germany: Benelux: of production rights •– Regulatory cycle –• Disposal Belgian retail –
Slide 81: Financial highlights
Financial highlights €m H1 2020 H1 2021 % YoY Sales 30,503 33,040 +8 1 EBITDA 3,679 4,768 +30 1 EBIT 2,185 3,163 +45 Adjusted Net Income 1 950 1,765 +86 OCFbIT 1,521 2,171 +43 Investments 1,422 1,908 +34 Economic Net Debt² -40,736 -40,866 0 1. Adjusted for non-operating effects 2. Economic Net Debt
Slide 82: Cash Conversion Rate of 49% in H1 2021
Cash Conversion Rate1 of 49% in H1 2021 in line with seasonality €bn 49% CCR1 4.8 -0.2 2.2 -2.4 1.2 -0.5 -0.5 -1.9 -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
Slide 83: END unchanged despite high investments and dividend payment
END unchanged despite high investments and dividend payment €bn -8.6 Asset Retirement Obligations (ARO) -8.6 Pension provisions Net financial position -6.4 -6.4 -25.7 -25.9 -0.8 0.0 +1.8 -1.5 +0.3 -40.8 -40.9 END OCF Net Investments Pensions2 Dividends Other END Q1 2021 Q2 2021 Q2 20211 (incl. AROs)
Slide 84: Divisions: Energy Networks
Divisions: Energy Networks EBIT1 Drivers €m +• Covid-19 impact in 2020 1,652 +8% 1,777 All +• Organic RAB growth CEE & Turkey 321 391 +• Normalized weather (vs. H1 2020) Sweden 186 192 Germany –• Regulatory cycle Germany 1,145 1,194 CEE & Turkey +• Slovakia: first time contribution of VSEH2 H1 2020
Slide 85: Divisions: Customer Solutions
Divisions: Customer Solutions EBIT1 Drivers €m +• Covid-19 impact in 2020 +75% 838 All +• Normalized weather (vs. H1 2020) 355 Germany 480 UK +• Restructuring benefits Benelux 68 273 163 UK 57 66 252 +• Strong operational performance Other 84 Other H1 2020 H1 2021 +• Sweden: one-off effect €m German
Slide 86: Non-Core business
Non-Core business EBIT1 Drivers €m +• Nuclear +198% production rights agreement 717 Preussen (~€500m) Elektra +• Higher availability of plants Preussen 694 Elektra 241 Turkey –• FX effects Generation 222 Generation +• Improved operational performance Turkey 23 19 H1 2020 H1 2021 PreussenElektra: Hed
Slide 87: Adjusted Net Income
Adjusted Net Income €m H1 2020 H1 2021 % YoY EBITDA1 3,679 4,768 +30 Depreciation/amortization -1,494 -1,605 -7 1 EBIT 2,185 3,163 +45 Economic interest expense (net) -559 -496 +11 1 EBT 1,626 2,667 +64 1 Income Taxes on EBT -406 -614 -51 % of EBT 1 -25% -23% +8 Non-controlling interests -270 -288 -
Slide 88: Reconciliation of EBIT to IFRS Net Income
Reconciliation of EBIT to IFRS Net Income €m H1 2020 H1 2021 % YoY 1 EBITDA 3,679 4,768 +30 Depreciation/Amortization/Impairments -1,494 -1,605 -7 1 EBIT 2,185 3,163 +45 Interest result -332 -361 -9 Net book gains 159 59 -63 Restructuring -305 -176 +42 Mark-to-market valuation of derivatives -351 1,
Slide 89: Cash-effective investments
Cash-effective investments €m H1 2020 H1 2021 % YoY Energy Networks 1,299 1,320 +2 Customer Solutions 332 306 -8 Corporate Functions & Other -365 133 +136 Consolidation -2 1 +150 Non-Core 158 148 -6 Investments 1,422 1,908 +34 89
Slide 90: Economic Net Debt
Economic Net Debt1 €m 31 Dec 2020 30 Jun 2021 Liquid funds 4,795 3,523 Non-current securities 1,887 1,790 Financial liabilities -30,720 -31,399 2 Adjustment FX hedging 82 216 Net Financial Position -23,956 -25,870 Provisions for pensions -8,088 -6,400 Asset retirement obligations -8,692 -8,596 Econo
Slide 91: Economic interest expense (net)
Economic interest expense (net) Difference €m H1 2020 H1 2021 (in € m) Interest from financial assets/liabilities -526 -487 39 Interest cost from provisions for pensions and similar provisions -47 -31 16 Accretion of provisions for retirement obligation and similar provisions -2 0 1 Construction per
Slide 92: Financial calendar & important links
Financial calendar & important links Financial calendar November 10, 2021 Quarterly Statement: January – September 2021 November 23, 2021 Capital Markets Day 2021 March 16, 2022 Annual Report 2021 May 11, 2022 Quarterly Statement: January – March 2022 May 12, 2022 2022 Annual Shareholder Meeting Aug
Slide 93: E.ON's Investor Relations Team
E.ON‘s Investor Relations Team Analysts & Institutional Investors Verena Nicolaus-Kronenberg Max Sadrina Head of Investor Relations Manager Investor Relations verena.nicolaus-kronenberg@eon.com max.sadrina@eon.com +49 172 8344377 +49 152 09331400 Event & Roadshow Management Martina Burger Björn Sigg
Slide 94: Disclaimer
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