E.on Se · XETR:EOAN
E.on — Investor Day (June 2005)
18 slides from E.on's investor day presentation, Jun 29, 2005
Slide 1: E.ON UK: Our Business Model
E.ON UK: Our Business Model Dr. Paul Golby, Chief Executive, E.ON UK E.ON Capital Market Day UK June 29, 2005
Slide 2: Topics for today
Topics for today 1 Introduction to E.ON UK – What we have achieved 2 Key political and market challenges 3 Responding to the challenge 1
Slide 3: E.ON UK forms a major part of E.ON's strategy to be the world's leading power and gas company
E.ON UK forms a major part of E.ON’s strategy to be the world’s leading power and gas company U.S.-Midwest U.K. Kentucky: No. 1 in power generation No. 2 in power generation with with 47 %MAIN of total 95 TWh. 11% of total 350 TWh. No. 1 in power/gas retail with No. 2 in power/gas retail with 18% 42
Slide 4: E.ON UK contributed over 1 billion Euro to E.ON's 2004 operating result
E.ON UK contributed over 1 billion Euro to E.ON’s overall 2004 operating result Adjusted EBIT by market unit in million € 2004 20031) E.ON UK – Key financial figures Central Europe 3,602 2,979 in million € 2004 2003 Pan-European Gas 1,428 1,4632) Sales 8,490 7,923 U.K. 1,017 610 Adjusted EBITDA5) 1,
Slide 5: E.ON UK – Transformation into a focused, leading and balanced company
E.ON UK – Transformation into a focused, leading and balanced company Powergen before 2002 E.ON UK now • UK based electricity company with operations • Transformed into a leading power and gas in the US (LG&E) and Asia Pacific company focused on the UK • Long generation position in the UK gave high
Slide 6: E.ON UK now: a top position in each of our markets
E.ON UK now: a top 2 position in each of our markets E.ON UK Energy Wholesale Central Networks Retail • Commodity trading • 2nd largest power distribution • Electricity, Gas and Home Energy (Coal, Oil, Gas, Power, Carbon) business Services • Providing power to 4.8 million • 2nd largest retailer • 2n
Slide 7: Optimizing an integrated value chain at E.ON UK
Optimizing an integrated value chain at E.ON UK Energy Wholesale Distribution Retail Generation Trading Risk Management 6
Slide 8: The energy industry particularly in the UK faces a number of challenges
The energy industry particularly in the UK faces a number of challenges Increasing global energy demand and rising prices Managing the UK’s transition to a net gas importer Investing to replace ageing assets CO2 is a major issue – threat or opportunity? Industry and Government need to work together
Slide 9: Oil and gas prices have risen significantly over the last year
Oil and gas prices have risen significantly over the last year leading to high and volatile electricity prices Oil 60 Brent Crude Rolling Front Month 50 $/barrel Ÿ Oil markets remain volatile with price 40 levels causing world wide concerns 30 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Gas 75 NBP Gas Winter
Slide 10: The UK has become a net gas importer
The UK has become a net gas importer, which will result in a period of higher and more volatile prices Gas infrastructure built Potential new import • For 30 years, plentiful North Sea oil and infrastructure gas have cushioned Britain - this is now quickly changing • The UK is now a net importer of
Slide 11: The UK also has a major challenge to replace ageing coal and nuclear plant
The UK also has a major challenge to replace ageing coal and nuclear plant UK Generation Plant Closure by fuel GW • A significant portion of current UK generation 28 capacity is set to close by 2015 24 • The bulk of the UK nuclear fleet will close - 20 a 12% loss of current market capacity. 16 12 •
Slide 12: Government target to reduce CO2 emissions by 60% by 2050
These challenges are in addition to the Government’s target to reduce CO2 emissions by 60% by 2050 Carbon emissions per annum Business as usual The UK is not on track to achieve the 14 1 wedge targeted reductions due to Billion tons of carbon pa (global) avoids 1 billion tons of Carbon Ÿ increasing
Slide 13: Key Challenges Energy Wholesale
Key Challenges Energy Wholesale Market Environment Ÿ Volatile and increasing commodity prices Ÿ Make money, control costs, manage risks – fit for Optimizing now purpose hedging strategy Shaping the future Ÿ Creating options for growth 12
Slide 14: Key Challenges Retail
Key Challenges Retail Cost management Ÿ Market leading and scalable systems Rising wholesale costs Ÿ Focusing on profitability per customer Growing Value Ÿ Integrated optimization strategy 13
Slide 15: Key Challenges Central Networks
Key Challenges Central Networks Achieve leading performance Ÿ Continuing to outperform Innovative Investments Ÿ Energy Services business Regulatory Environment Ÿ Setting the DR5 agenda 14
Slide 16: Strategic direction – Our response to these challenges
Strategic direction – Our response to these challenges Working with government Invest in to shape UK Energy Policy flexible and lower carbon intensity generation including renewables Working with E.ON Ruhrgas to optimize gas supply position (LNG, storage, pipelines) Delivery against DR4 framework -
Slide 17: Summary
Summary We… • …have transformed E.ON UK in the last 3 years into a leading integrated UK power and gas company – a perfect example of E.ON’s strategic market approach • …have delivered on our promises • …are excellently positioned to tackle these challenges & create further shareholder value 16
Slide 18: Forward-looking statements disclaimer
This presentation may contain forward-looking statements based on current assumptions and forecasts made by E.ON Group management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development o