E.ON Capital Markets Story 2021
Transcript of E.ON Capital Markets Story 2021
Capital
StoryFebruary 2021incl. 9M 2020 financials
Markets
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.
Our purpose
E.ON business model fully focused on the energy transition
3
Non-core activities Core activities: Customer centric energy infrastructure
~€4.1bn
Group EBIT 20191 Adj. Net Income 20191
~€1.6bn
Dividend per share 2019
0.46€78,948
Employees 2019
1. Adjusted for non-operating effects; pro-forma figures FY 2019, not audited
Up-stream & Power Generation
Power & Gasdistribution
Supplybusiness
E.ON fully focusing on the energy transition
E.ON’s two core businesses
4
Energy Networks Customer Solutions
~€33bn Regulated Asset BaseGermany €21.9bn
Sweden €3.8bnCEE & Turkey €7.6bn1
~74 GW renewables capacityconnected to E.ON networks
~20% of renewable assets in Europeconnected to E.ON networks
~53m customers across Europe2
Germany 13.9m
UK 10.5m3
Other ~28m4
~30% of adj. EBIT5 from decentralenergy infrastructure
4x Top 1 market leading positions6x Top 3
1. 100% view for Slovakia and Turkey 2. Including at-equity participations; earnings of Customer Solutions business of Croatia, Slovenia and VSEH allocated to Energy Networks due to size 3. To standardize reporting, the definition of customers was adjusted 4. 2019 adjusted due to the disposal of EKER in Hungary and first-time consolidation of VSEH in Slovakia 5. Adjusted for non-operating effects
Table of contents
1
2
3
4
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……………………………...……………………………………………………… 38
…………………………..……………..………………………………………………………… 53
9M 2020 Update
Strategic Update
Financial Update
Appendix
……………………………...……………………………………………………… 15
9M 2020Update
✓ Strong operational performance in Q3 2020
✓ 2020 EBIT guidance of €3.6 - 3.8bn confirmed
✓ Current selective lockdown measures in E.ON countries
without significant impact on E.ON FY 2020
✓ Mid-term targets and dividend guidance confirmed
✓ Integration of innogy and synergy delivery fully on track
7
E.ON 9M 2020 results9M 2020 results underpin confidence forremainder of the year
Key financials1Highlights
1. Adjusted for non-operating effects; pro forma figures 9M 2019, not audited
3,0
1,3
2,7
1,1
Adj. EBIT Adj. Net Income
-43.1
-42.1
30 Jun 2020
30 Sep 2020
Economic Net Debt
€bn
9M 2019
9M 2020
8
E.ON 9M 2020 resultsAlmost €60bn of potential EU funding for E.ON marketsearmarked for climate – already 200 projects identified
Funding focus matching E.ON’s core activities in customer centric energy infrastructure1
Efficient and decarbonized district heating and cooling systems
Energy efficiency in the industry sector and for SMEs
Renovation of private and public buildings(focus on schools and hospitals)
Smart grids
Storage infrastructure
Infrastructure for renewable energy
Renewable hydrogen
Smart and sustainable mobility
Preparation(Aug- Dec 2020)
Application(Jan4-Apr 2021)
Ongoing engagement of national governments with the EU Commission to draft plans
Submission of NRRPs3 by Member States to EU Commission outlining national investment and reform agendas
Expected funds allocation(May-Jun 2021)
Timeline and funding instruments vary between Member States, e.g. lengthy and competitive bidding procedures possible
Member States- Specific investment areas and instruments
1. Under political negotiation, list simplified and not-exhaustive 2. €312.5 bn under Recovery and Resilience Facility (RRF) of which €157.7bn are allocated to E.ON countries; climate earmarking rate of 37% resulting in €58.4bn, digital earmarking of 20% resulting in €31.5bn 3. National Recovery and Resilience Plans 4 According to the draft Regulation, the NRRP submission started officially on Oct 15th, but we expect Member States will submit after the EU legal framework is finalized, so likely starting in January. Source: European Commission
€31.5bn digital
earmarking in E.ON markets2
€58.4bn climate
earmarking in E.ON markets2
200 potential projects
identified
70%
80%
90%
100%
110%
Covid-19 impact until year end in line with expectations
Power demand recovered faster than expected
• Customer Solutions: demand levels recovered above expectations in Q3 leaving enough cushion. No need for further sell-backs expected
• Energy Networks: volume related effects recoverable in 2022 – 20243
• Current selective lockdown measures in E.ON
countries without significant impact on E.ONFY 2020 financials
• Payment behavior of customers remains unchanged compared to pre Covid-19: UK only market with higher day of sales, but unchanged vs. H1 2020
• UK related working capital impact started to reverse from
~€100m to ~€50m
• Bad debt: Covid-19 related total Group bad debt provision slightly increased by ~€10m to ~€45m at the end of Q3 2020
91. Source: entso-e 2. Period 1 Jan 2020 – 26 Oct 2020 3. Period for recovery of lower revenues in 2020 in Germany
E.ON 9M 2020 results
○ -4%2
Mar unchanged/low slight change/medium worsened/high
Government
intervention
Change of
payment behavior
Day of
sales
GER
UK
NL
Payment behavior and bad debt in line with expectations; UK remains outlier
/
Germany relative to 20191
April May Jun Jul Aug Sep Oct
Sound EBIT development despite Covid-19 impact and mild weather
EBIT1 9M 2020 vs. 9M 2019 pro forma€ m
2,688
2,987
-40
Energy
Networks
9M 2019
pro forma
-223
Corp. Functions
& Other, Cons.
Customer
Solutions
-8
-28Non-Core
2,6889M 2020 ~€2.9bn (excl. Covid-19)
Key drivers
~€-120mCovid-19 impact
(volumes)
~€-130mCovid-19 impact
(sell-backs, volumes & bad debt)
1. Adjusted for non-operating effects; pro forma figures 9M 2019, not audited
E.ON 9M 2020 results
Non-Core• PreussenElektra: higher achieved prices,
higher depreciation from purchase of production rights
• Turkey Generation: one-off effect in 9M 2020
+/–
Energy Networks
• Covid-19-related lower volumes
• Germany: weather-related lower volumes
• Sweden: lower WACC in new regulatory period
–
––
–
Customer Solutions
• Covid-19: sell-back of volumes (B2B) & bad debt
• Weather impact on volumes
• UK: restructuring benefits
–
10
–
+
2.688
1.852
1.089
Economicinterest result
Group EBIT1
Minorities
-836
Profitbefore Taxes1
-463Income taxes
-300
AdjustedNet Income1
Tax rate at ~25%
11
Adjusted Net Income in line with EBIT development
1. Adjusted for non-operating effects
0.42 EPS (€ per share)
9M 2020€ m
E.ON 9M 2020 results
END9M 2020
-24.6
-8.8
-0.6+0.2
-26.2
-43.1
OCF3Q 2020
-8.0
Net Investments 3Q 20201
-8.8
-8.6
+2.4
-1.0
ENDH1 2020
Pensions2 Other (incl. AROs)
-42.1
€ bn
12
Economic Net Debt (END) improved due to strong Operating Cash Flow in Q3 2020
1. Net of divestments; including disposal of EKER in Hungary 2. Actuarial interest rates for German pensions at 1.0% (vs. 1.2% @ H1 2020),for UK pensions at 1.6% (vs. 1.6% @ H1 2020)
Net financial position
Asset Retirement Obligations (ARO)
Pension provisions
E.ON 9M 2020 results
Group outlook 2020 and mid-term delivery plan confirmed
Group Guidance 2020
EBITDA1: €6.8-7.0bn
EBIT1: €3.6-3.8bn
Capex2: ~€4.2bn
ANI1: €1.5-1.7bn
13
1. Adjusted for non-operating effects; CAGR’s technically adjusted to new 2020 guidance, recovery of Covid-19 effects not yet reflected 2. Includes transaction related effects; cash-effective capex outlook excluding transaction related effects amounts to ~€4.6bn 3. Excluding provision utilization for nuclear decommissioning, average for 2020-2022
E.ON 9M 2020 results
2020 – 2022 delivery plan
Group EPS1 growth
17-22% CAGR
Dividend per share (DPS) growth up to 5% p.a.
Group EBIT1growth
11-13% CAGR
Average cash conversionrate3
of 95%
Capital structure with
strong BBB/Baarating
✓
✓
✓
✓
Guidance overview
€ bn 2019 pro forma3 2020 2020-2022
EBITDA1 6.904 6.8-7.0 5-6% CAGREnergy Networks 5.364 5.0-5.2
Customer Solutions 1.126 1.0-1.2
Non-Core 0.617 0.8-1.0
Corporate Functions & Other -0.203 ~-0.3
EBIT1 4.065 3.6-3.8 11-13% CAGREnergy Networks 3.499 3.1-3.3
Customer Solutions 0.541 0.4-0.6
Non-Core 0.366 0.3-0.5
Corporate Functions & Other -0.341 ~-0.4
ANI1 1.573 1.5-1.7 17-22% CAGR
EPS1 €0.60 €0.58-0.65 17-22% CAGR
Dividend €0.46 up to 5% p.a. up to 5% p.a.
Capex2 4.435 ~4.24 ~13Energy Networks 3.149 ~3.4 ~9.7
Customer Solutions 1.008 ~0.8 ~2.7
Leverage 5.6x ~5x1. Adjusted for non-operating effects 2. Cash-effective investments 3. Pro forma figures FY 2019, not audited, reflecting transaction adjustment 4. Includes transaction related effects; capex outlook excluding transaction related effects amounts to ~€4.6bn
14
E.ON 9M 2020 results
Strategic Update
Sustainability
Dividendgrowth
Performance
Customer centricenergy
infrastructure
We commit to a sustainable dividend per share growth of up to 5% annually until 2022 and further growth beyond
1We are the green investment opportunity and we enable the energy transition2We focus on customer centric energy infrastructure which is the core of our resilient portfolio3Performance culture is part of our DNA and we continuously deliver on operational excellence4
Why invest in E.ON?
16
Why invest in E.ON?
Sustainability
Dividendgrowth
Performance
Customer centricenergy
infrastructure
17
Net zero is the new normal – E.ON is driving carbon reduction
One out of five renewable
assets in Europe3 connected to E.ON’s grids
IPCC1 long term goal to limit global
warming to 1.5°C
Green Deal: The EU will be climate neutral
by 2050
German greenhouse gas emissions to be cut
by 55% by 20302
Global challenges E.ON’s contribution
Avoided emissions together with our clients
2019: >100m tons CO2
E.ON will become carbon neutral4
by 2040
1. Intergovernmental Panel on Climate Change 2. Pre Green Deal 3. Considering EU27 4. Carbon neutrality by 2040 (Scope 1 and 2), 75% carbon reduction by 2030(Scope 1 and 2), 50% reduction of Scope 3 emissions by 2030, carbon neutrality by 2050 (including Scope 3). Base year: 2019 pro forma 5. UN Sustainable Development Goals
Focus SDGs5
18
Decarbonization means deep electrification
European1 energy demand 2015 vs. 2050…TWh
2050
~12,500
~7,000
2015
~20%~67%
+90%
-40%
… with huge impact on energy infrastructure
Increase of electricity demand (+90%)
• Deep electrification of different sectors and
decentral generation creates the need for
substantial grid investments
• Substitution of fossil fuel consumption through
green electricity
Reduction of total energy demand (-40%)
• Major decarbonization goals provide business opportunities for energy efficiency products and services
1. Considering EU27, Source: https://www.eea.europa.eu/data-and-maps/figures/primary-and-final-energy-consumption (energy demand)/ http://inrestruct.com/wp-content/uploads/2015/04/Practical-guide-to-a-low-carbon-Europe-2050.pdf (power demand)
Power Other
19
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
Customerinterface
(data usage)
EnergieMonitor & Klima-Navi Transparency about CO2-footprint and impact of energy transition to municipalities and customers
Asset Control Systems Local Energy System
CO2 FootprintApp
Regional Energy Market
Energy Management System
Smart Home
Storage
Predictive Maintenance Data-driven decisions withmachine learning
Network operation
(data distribution)
SystemFlexibility
Control Center
Predictive Maintenance
Asset Monitoring
Data, AI
Automated Grid Planning
Physicalassets
(data generation)
Grid SmartificationIntelligent substation collects real-time data from our networks to enhance grid management
NetworkGeneration
E-mobility
Buildings
Broadband
Decentralization means digitalization and efficiency potential
20
Why invest in E.ON?
Sustainability
Dividendgrowth
Performance
Customer centricenergy
infrastructure
21
E.ON transformed into Europe’s energy infrastructure powerhouse
2x
Regulated Asset Base1
2x
customer accounts
~€740m
delivery of annual net
synergies by 2022
~80%regulated earnings
with benefits for
credit rating2
Long-term
energy infrastructure
substitutes increasingly
merchant renewable
assets
Integrationbundling of synergies
for the benefit of our
customers
1. German RAB 2. Based on 2020 EBIT, EBIT adjusted for non operating effects
E.ON’s strategy implementation accelerated by innogy takeover
22
Infrastructure is at the heart of E.ON’s capital allocation
1. IFRS segments used in external reporting 2. Includes Energy Sales and Services and New Solutions 3. Includes City Energy Solutions and B2B Solutions4. Excludes investments in Corporate Functions & Other and Non-Core
Energy Networks1
Customer Solutions1
~10%Retail
investments4
~90% Infrastructure
investments4Regulated energy networks
Energyretail2
Decentral energyinfrastructure3
23
2010 2020 2030 2050
Energy transition driving multi-decade investment opportunities
Source: Historic values: Bundesnetzagentur Monitoringbericht 2019. Future outlook: dena-Leitstudie Integrierte Energiewende1. Assuming 2% inflation beyond 2020
Industry investments in German power distribution networks excluding Green Deal upside€ bn
2.5
4.7
6.7
2009
Drivers
24
Germany
E.ON is the leading energy network company inNorthern and Central Europe
Sweden
3.8 21.9 7.6
E.ON Regulated Asset Base (RAB) – regional split€ bn
1. RAB is the value of all distribution assets determined by the regulator. In general, RABs from different regulatory regimes are not directly comparable due to significant methodical differences. These include for example different regulatory asset lifetimes, asset valuation methods or treatment of customer contributions for network connections. Central Eastern Europe including: Czech Republic, Hungary, Poland, Romania, Slovakia 2. 100% view for Slovakia and Turkey
CEE2 &Turkey233.2
Total RAB1, 2
Power RAB Gas RAB
25
27.7
Gas 5.5
33.2
2019 2022
Power
4-5%CAGR2
E.ON Regulated Asset Base1 growth€ bn
• Multi-decade growth potential stemming from mega-trends
• Optimizing our existing gas asset base with limited investment needs
• Future growth option from hydrogen
Power
Gas
Beyond
Long-term RAB growth with further upside potential
1. RAB is the value of all distribution assets determined by the regulator. In general, RABs from different regulatory regimes are not directly comparable due to significant methodical differences. These include for example different regulatory asset lifetimes, asset valuation methods or treatment of customer contributions for network connections, including 100% view for Turkey and Slovakia. Constant year-end 2019 FX-rates 2. Relates to power RAB
26
~90% of German gas network business is
linked to electricity concessions
Gas activities closely coupled with power business Limited capex spent on gas
~5% of Group capex1 is spent
on our gas business
Existing connections
37%
37%37%
14%
50%
26%
New-builds
Other
District heating
Gas
Future potential for industry and transport
H2
1. Cash effective investments, average for 2020-2022 2. Source: BDEW 2020
The role of gas in German heating market2
Gas distribution with stable earnings and limited capexGas distribution with stable earnings and limited capex
27
Four years of regulatory stability
Regulatory periods per country
2024 2025 2026 20272020 2021 2022 2023
70%2of the Energy Networks
EBIT is highly visible until 2024
1. Length of upcoming regulatory period still under discussion 2. Based on 2019 pro forma EBIT, adjusted for non operating effects
2028
Germany(Power)
Sweden
Romania
Hungary
Czech Republic1
PolandTurkey
Slovakia1
Germany (Gas)
28
Exemplary earnings components beyond allowed return
Allowed
return
Opex efficiencies
Capex efficiencies
Regulatory cost recognition
Special incentives
Actual opex vs. allowed opex
Outperformance of standard prices set by regulator
E.g. reliability and network losses
RAB
growth
Total regulated earnings
=
Allowed return Additional earnings components in our markets
29
Leveraging strong partnerships and core competencies to drive additional businesses
… create a competitive edge for additional businessesLong-term partnerships with municipalities …
Concession-based RAB
~2/3
Non-concession-based RAB~1/3
RAB€21.9bn1
>9,000concessions in Germany
1. German power and gas RAB
Technical grid services e.g. O&M
Smart meterse.g. installation
Broadbande.g. new customer
connections
Water and waste-watere.g. supply and
operations
City Energy Solutions (CES)Local heating and cooling solutions formunicipalities, districts and single sites
… including other areas benefitting from our partnerships
30
Earnings growth from reducing carbon emissions viadecentral energy infrastructure
City quarter solutionsIntegrated energy conceptse.g. Werksviertel MunichAverage contract duration: 20-40 years
Low temperature heating and cooling gridsE.g. ectogrid: zero emission energy hybrid system with upto 20% cost savings Top 2
market position inSweden and Germany1
Large B2B solutions/district heating gridsOn-site generation solutionsAverage contract duration: 15-40 years
Single/multi-site solutionsDecentralized sustainable local energy solutions (e.g. PV at Audi in Győr, Hungary)
~25%CAGREBIT 2020-20222
1. City Energy Solutions, based on heating volumes sold 2. City Energy Solutions and B2B Solutions, EBIT adjusted for non operating effects31
Customer numbers B2B & B2C
32
9,8 10,0
13,5 13,6
4,6 4,6
10,9 10,5
13,9 13,9
52.6
FY 2019 9M 2020
52.7
Stable customer base (m)1
Customer accounts
Germany 2 UK3 Benelux4 Other5 Turkey
-0.2%
Thereof: electricity customers (m)1
Thereof: gas customers (m)1
9,8 10,0
10,8 10,92,6 2,5
6,6 6,4
11,6 11,6
FY 2019
41.5
9M 2020
41.4
2,7 2,8
2,0 2,1
4,2 4,1
2,3 2,2
11.211.2
FY 2019 9M 2020
+0.0%
-0.2%
1. Including at-equity participations; earnings of Customer Solutions business of Croatia, Slovenia and VSEH allocated to Energy Networks due to size 2. 2019 adjusted due to the disposal of substantial parts of the heating customer business 3. To standardize reporting, the definition of customers was adjusted 4. 2019 adjusted for the acquisition of the Dutch energy utility VandeBron 5. 2019 adjusted due to the disposal of EKER in Hungary and first-time consolidation of VSEH in Slovakia
E.ON 9M 2020 results
Why invest in E.ON?
Sustainability
Dividendgrowth
Performance
Customer centricenergy
infrastructure
33
Performance culture is part of our DNA
Continuous improvement
Digitalization & innovation
Regulatory outperformance
Customer satisfaction
Transaction related synergies npower & E.ON customers migrated onto new platform E.ONnext
Operational excellence
EBIT1 developmentGBP m
✓ Synergy delivery on track
✓ 5% achieved in 2019
✓Measures validated and delivery de-risked
✓ €740m confirmed target
by 2022
Top priorities Performance culture1. Adjusted for non operating effects 2. After smart meter investments
>20232019 2022 2023
~100m
Earnings improvement: Combined EBIT1 of at least GBP100m in 2022 and improvement beyond
Free cash flow will be positive2 from 2023 onwards
34
Synergy delivery fully on track
2019 2020 2021 2022
~45%
~20%
~100%
Estimated transaction related net synergies1 of ~€740m
1. Start of voluntary leave program
2. External budget cut3. Optimization of IT
services
1. Full integration of headquarter
2. Organizational integration of Customer Solutions businesses
1. Synergies in Energy Networks
2. Integration of customer portfolios
3. Consolidation of IT landscape
5%✓
1. Net accretive to EBIT, EBIT adjusted for non operating effects and before implementation costs (implementation costs not included in adjusted EBIT)
Customer Solutions
Energy Networks
Central Functions, IT and Other
27%
20%
53%
Synergy delivery by division
35
Renewal of IT architecture to drive operational excellence in Customer Solutions
• Already today at competitive Cost-to-Serve level
• Ambition: reduction to market leading level at low teens (€/customer)
Germany: Substantial ramp up of contracts to digital platform
UK: npower customer migration started in July 2020 as scheduled
• Already surpassed the level of 1 million contracts by earlyNovember 2020
• Over 250,000 first bills sent to customers via new platform
1. Compared to business plan announced in November 2019 2. After smart meter investments 3. Majority to be shown in non-operating result36
~1
~4
Mar 20 Jun 20 Sep 20 Dec 20 Dec 22 Aug 20 Oct 20 Dec 20 Q2 21 H2 22
million contracts
> 0.1 > 0.4 > 1.0
All npowercontracts migrated
All E.ON UKcontracts migrated
million contracts All Germancontracts migrated1
100%
85%
70%Efficient
Very efficient
E.ON’s performance culture adds sustainable value to businesses and customers
100%
95%Industry average 94%
8/9 E.ON networks obtain a 100% efficiency score, with 3 obtaining a super efficiency bonus
>€600m additional revenues in regulatory period1
1. Based on ~€4bn allowed power cost base relevant for efficiency factor
E.ON grids
All E.ON grids considered very efficient, with 2/3 being 100% efficient
8/9 E.ON grids 1/9 E.ON grids
German power network efficiency scores Sweden power network efficiency scores
37
Financial Update
€0.21
€0.30
€0.43 €0.46
2016 2017 2018 2019 2020 2021 2022 Growth beyond
We commit to annually grow the dividend per share by up to 5%
✓ ✓ ✓ ✓
Dividend per share (DPS)
39
E.ON’s 2020-2022 delivery plan confirmed
Group EPS1growth
17-22% CAGR
Dividend per share (DPS) growth up to 5% p.a.
Group EBIT1growth
11-13% CAGR
Average cash conversionrate2
of 95%Capital structure with strong BBB/Baa rating
1. Adjusted for non-operating effects; CAGR’s technically adjusted to new 2020 guidance, recovery of Covid-19 effects not yet reflected 2. Excluding provision utilization for nuclear decommissioning, average for 2020-2022
40
6-11%
3-8%
Strict capital allocation framework leads to sound investment profile
Sustainability focus Capital allocation in line with business priorities
Enable energy transition
Supporting SDGs1
Reduce customers‘ emissions
Human rights violations
Carbon heavy generation
Environmental degradation
Sustainability criteria:
Return framework
Hurdle rate
WACC (country & technology specific)
Project specific risk premium
E.ON Group excess return target
Hurdle rate composition: Indicative hurdle rates2:
1. UN Sustainable Development Goals 2. Illustrative hurdle rate ranges; post tax. Final hurdle is risk adjusted for each project and might vary 3. Includes New Solutions and Commodity Sales and Services 4. Includes City Energy Solutions and B2B Solutions 5. Excludes investments in Corporate Functions & Other and Non-Core
✓
✓
✓
4-9%
41
E.ON allocates ~75% of investments to Energy Networks
~4.21
Investments 2020€ bn
~131
1. Cash effective investments including Corporate Functions & Other and Non-Core, assuming no further severe lockdowns in our major markets, includes transaction related effects; Capex outlook excluding transaction related effects amounts to ~€4.6bn for 2020 2. Based on investments in Energy Networks and Customer Solutions 3. Corporate Functions & Other and Non-Core
Investments 2020-2022 € bn
Other3Customer SolutionsEnergy Networks
~90%2
infrastructure
~90%2
infrastructure
42
Investments with strong focus on infrastructure
100%infrastructure
Energy Networks 2020-2022 € bn
~9.71
Power OtherGas
Customer Solutions 2020-2022 € bn
~65%infrastructure
B2B Solutions
UK smart meter roll-out
City Energy Solutions
IT driven retail investments
New Solutions
E-mobility
~2.71
1. Cash effective investments, assuming no further severe lockdowns in our major markets 43
6.8-7.0
3.6-3.8
Attractive Group earnings growth
1. Adjusted for non operating effects; assuming no further severe lockdowns in our major markets
5,4
1,10,6
6.9
Outlook1
CAGREBITDA1
€ bnEBIT1
€ bn
11-13%EBIT
5-6%EBITDA
Guidance:
3,5
0,50,4
4.1
Energy Networks Customer Solutions Corporate Functions & Other Non-Core
2020-20222019pro forma
2020 2019pro forma
2020
44
5.0-5.2
Mid-term growth in Energy Networks earnings backed byorganic RAB growth
3,7
0,7
1,0
5.4
1. Adjusted for non operating effects; assuming no further severe lockdowns in our major markets
2,4
0,5
0,6
3.53.1-3.3
Guidance:
Outlook1EBITDA1
€ bnEBIT1
€ bn
Germany Sweden CEE & Turkey
2020-20222019pro forma
2020 2019pro forma
2020
45
Customer Solutions earnings growth driven by digitalization and UK turnaround
1. Adjusted for non operating effects; assuming no further severe lockdowns in our major markets 2. ~30% EBITDA share relating to decentral energy infrastructure
EBITDA1,2
€ bn
1.0-1.2
0.4-0.6
0,6
0,2
0,3
1.1
0,5
0,10,1
-0,2
0.5
2019
pro forma
Decentral energy infrastructure
~30%
Guidance:
Outlook1EBIT1
€ bn
Germany UK Benelux Other
2020-20222019pro forma
2020 2020
46
Strong EPS growth of 17-22%
Adjusted Net Income1
€ bn
1.61.5-1.7
17-22%
Earnings per share1
€
1. Adjusted for non-operating effects; assuming no further severe lockdowns in our major markets
0.60 0.58-0.65
Payoutratio
77%
Outlook1
CAGR
2020-20222019pro forma
2020 2019pro forma
2020
47
Significant refinancing benefits over the next three years
0.0%
0.8%
1.7
Q4
2022
0.0%
Q1
2023
0.4%
5.9%
1.3
5.6%
0.4%
3.0%
Q4
20202
Q1
2024
0.9%
>2024Q2
2024
6.5%
3.9%
Q3
2024
0.0%3.2%
0.5
Q2
2021
0.6
5.5%
1.5
0.3
0.9
1.1
0.8
17.1
6.5%
Q4
2023
Q3
2021
5.7%
Q2
2023
0.0%0.6
5.5%
Q3
2022
1.1
481. Bonds issued by E.ON SE and E.ON International Finance B.V. (fully guaranteed by E.ON SE); bonds issued by innogy SE and innogy Finance B.V. (fully guaranteed by innogy SE) 2. Including innogy EIB-loan €645m 3. Amount of refinancing benefits depends largely on refinancing conditions at time of bond issuance
Volume
% Coupon
Bond maturities as of end 9M 20201,2
€ bn
3.2%
Refinancing benefits until 2022 of up to
~€200m3
Green financing is an integral part of our funding strategy
€4.6bn outstanding
1. Cash effective investments including Corporate Functions & Other and Non-Core, assuming no further severe lockdowns in our major markets 2. Based on investments in Energy Networks and Customer Solutions 3. Corporate Functions & Other and Non-Core
To finance our investments we have tapped the green bond market …
~€1bn p.a.
… and intend to issue more:
Total investments 2020-2022€ bn
95%energy transition investments2
131
Energy Networks Customer Solutions Other3
Revolving credit facility linked to sustainability ratings:
€3.5bn
49
E.ON’s approach to manage Economic Net Debt
Economic Net Debt
€ bn
-8.6
-8.8
-24.6
9M 2020
-42.1
Asset Retirement Obligations Net financial positionPensions
• 0% real discount rate floor reached: only upside
• Further upside: outperforming provisions by operational excellence
“Beat the provisions”
• Sound management of cash flow
• Re-financing benefits from lower interest rates
“Manage for cash”
• UK pension obligations largely funded
• Sensitivity GER pensions: -50bps +€1.6bn
• Duration of pension obligation ~18 years
“Focus on thelong end”
50
Rating target re-confirmed, positive END effects above initial expectations
Strong BBB/Baa rating target
Leverage factor1 Selected END effects 2020-20223
• 95% Cash conversion rate4
• Working Capital optimization program & ARO5 reduction ~+€1.5bn (before: ~+€1bn)(ARO reduction: ~€200m already achieved 2019)
• Nord Stream 1 transfer to pension fund executed ~+€1bn
• Transaction effects +/-€0bn (before: -€0.5bn)Remedies, merger squeeze-out, locked box, restructuring Hungary
• Integration costs up to ~-€1bn
20222019
pro forma2
5.6x
~5x
↑
511. Economic Net Debt/EBITDA, EBITDA adjusted for non-operating effects 2. Reflecting transaction adjustment (END FY 2019 reduced by ~€0.5bn) 3. Negative effect indicates increase of Economic Net Debt and vice versa 4. Excluding provision utilization for nuclear decommissioning, average for 2020-2022 5. Asset Retirement Obligations
Dividend commitment fully in line with deleveraging
EPS1 above DPS growth… … allowing deleveraging and sustainable dividend growth
2019pro forma
2020 2021 2022
…lowers payout ratio…
Strong BBB/Baa rating
target
2019
pro forma
2022
5.6x
~5x
77% Payout ratio
2019 pro forma
2022
1. Adjusted for non operating effects; assuming no further severe lockdowns in our major markets 52
Appendix
IFRS reporting divisions
E.ON new segmentation from 2020 onwards
Infrastructure
Energy sales and services
New Solutions
B2B Solutions
City Energy Solutions
(CES)
Power grid
Gas grid
Additional businesses
Decentral energy infrastructure
Regulated networks
Energyretail
Energy Networks Customer Solutions
DE SWE CEE1 & TR Benelux2 DE UK Other3
1. Central and Eastern Europe, including Czech Republic, Hungary, Poland, Romania, Slovakia, Croatia and Slovenia 2. Belgium, The Netherlands and Luxemburg 3. Including Czech Republic, Hungary, Italy, Poland, Romania, Sweden 4. PreussenElektra 5. Turkey Generation
Non-CoreCorporate Functions &
OtherPE4 TR Gen5
54
E.ON’s strong ESG profile
Experienced, diverse and independent
Efficient cooperation in Board Committees
Creation of Innovation and Sustainability Committee
Remuneration system closelyaligns management’s andshareholder’s interest
Energy efficiency solutions with our clients to reduce carbon emissions
Variety of nationalities, cultures,generations and genders in management & workforce
Creation of a work environmentthat protects the health and safety of customers and employees
Commitment to respect human rights, uphold labor standards, and fight against corruption
Energy Networks: High resilience due to high degree of underground cabling
Driving the energy transition through decentral & digital local networks
Climate neutrality by 2040 (Scope 1 & 2) & by 2050 (including Scope 3)1
Environmental GovernanceSocial
Avoided emission together with our clients2019: > 100mtons
Climate
Diversity
Security of energy supply
Health & Safety
Human Rights
SupervisoryBoard
SupervisoryBoardCommittees
Remuneration
1. Carbon neutrality by 2040 (Scope 1 and 2), 75% carbon reduction by 2030 (Scope 1 and 2), 50% reduction of Scope 3 emissions by 2030, carbon neutrality by 2050 (including Scope 3). Base year: 2019 pro forma
55
E.ON’s sustainability awards, ratings and rankings
Text 1
Text 1
Text 1
Overall ESG Risk Score = 81 (Leader Group)Relative Position 11 out of 192
E.ON is index member1, i.e. one of the advanced companies in Europe – score: 61/100
Result: AA
Rating: C+
Text 1CDP Score: ASector Average: C
Text 1
Overall ESG Score: 3.2 Sub Sector Average Multiutilities: 2.8Industry Average Utilities: 2.5
Text 1 E.ON ranks 6th out of 30
Text 1
E.ON ranks 4th in the Green Utilities Report from Energy Intelligence (EI) Group
1. Vigeo/EIRIS has rebranded as V.E, affiliate of Moody’s 56
Building blocks of allowed revenues in Germany
1. Old assets are those capitalized before January 1, 2006. New assets are those capitalized after January 1, 2006. Old assets are indexed up to 40% with asset-specific indices to determine the current costs. Relevant asset base for calculation of allowed return in 2019 is 2016 for power and 2015 for gas 2. Debt base consists of non-interest and interest bearing capital
Totex indexed toCPI and subject togeneral and individualefficieny targets
Opex
Capital Costs
Regulated asset base1
Old assets: current costs; new assets:
historic costs
Debt base2
(related to actual capital structure, minimum 60%)
Regulated equity base
(related to regulatory capital structure, maximum 40%)
Total allowed cost base
(Totex)
Adjustment of revenues, lagged
recoveries and pass-through items
Allowed revenues
Power (Old)
~10.2
~3.4
~6.5
Power (New)
Gas (Old)
Gas(New)
~9.5
~1.7
~3.0
~4.7
Thereof:
~4.0 power~0.7 gas
40% Cap
Thereof:
~8.3 power~1.2 gas
Schematic illustration for 2019 (power & gas)€ bn
~21.2
~1.1
57
Energy Networks Germany - Earnings components
~60%
~10%
~10%
~10%
~5%
0%
~50%
~15%
~5%
~15%
~5%
0%
Income from participations portfolio is at-equity/at-cost consolidated
Operational efficiency
Other infrastructure business3
Additional network-related business4
Other regulated earnings/temporary effects
Income from participations
Regulated return & depreciation2
Illustrative average EBITDA1 split (2019-2020) Illustrative average EBIT1 split (2019-2020)
1. Adjusted for non operating effects 2. Includes return on RAB, difference between regulatory and IFRS D&A and revenues for grid expansion 3. Other infrastructure businesses include e.g. water business 4. Additional network-related business includes broadband, smart meter and technical network services
58
336,0214,0
Continuous improvement in operative performance increases security of supply
1. System Average Interruption Duration Index 2. E.ON stand-alone figures 3. SAIDI increase due to weather related effects in 2019 22 minutes of disturbances (2014-2019), includes: weather effects and other system disturbances 4. Calculated as arithmetic average of respective countries
Power losses2 2014 vs. 2019SAIDI1,2 2014 vs. 2019
48,029,0
Germany
144,0 170,0
Sweden
2014 2019
CEE4
2014 2019
CEE4
Germany
Sweden
4,4 3,8
3,93,0
9,17,1
-40%
-36%
+18%3
-14%
-23%
-22%
2014 2019 2014 2019
2014 2019 2014 2019
59
RAB growth further supported by local drivers
17,3
2019 2022
3,8
2019 2022
1,6
2019 2022
Local driversPower RAB development€ bn
CzechRepublic
Germany1
Sweden2
3-5% CAGR
3-5% CAGR
4-6% CAGR
• Storm proofing• Renewable connections• Demand growth
• Renewable connections• Replacement• Digitalization
• New connections of B2B customers• Reliability• Modernization
1. Assuming constant number of network concessions 2. Excluding RAB re-evaluation following the beginning of new regulatory period 60
Network charges are only a small portion of German power price
Only
23%
Network charges
Electricity procurement, retail margin
Further taxes and levies
Renewable surcharge
Decarbonization currently not optimally supported, electricity disadvantaged
Composition of average electricity price
• Renewables surcharge to be borne by more customers• Carbon minimum price or tax• Electricity tax to be redesigned
German power price needs to be ‘cleaned up’
61
EU financing successful for major growth projects across Europe with up to ~€250 m funding grants
Danube InGrid3,4
• Improved security of supply and capacity in the border regions• Implementation of smart grids
1. Project of Common Interest (EU Horizon 2020) 2. Again Connected Networks 3. Projects are part of the 4th PCI list of EU 4. Danube Intelligent Grid
Smart Border Initiative3 (SBI)
• Commission a cross-border smart distribution grid at low cost• Solving network bottlenecks and voltage problems intelligently
• More than €500m investments planned• Around 50% approved in EU grants• All projects included in EU PCI1 list
ACON2,3 1.0/ACON 2.0
• Increasing cross-border power distribution capacity and grid modernization through implementation of smart grids
62
City Energy Solutions selected projects
Key figures Project examples
• 50% increase of renewable/recovered energy• 99% efficiency of CHP• 659 GWh total output
Högbytorp
• Inhouse construction management • 100% renewable heating supply
from 2023 (biogas)
Elephant & Castle London
• 50% less CO2
• 10% lower energy cost• High level of energy self-sufficiency
Werksviertel München
Countries with CES projects
>750k customers
~5k installations under management
350 heating, cooling& steam networks
€1.5bn revenue
• 8,100t CO2 savings per year • 90% CHP efficiency• 88% of heat demand covered by bio natural gas
Hanseviertel Lüneburg
63
39 TWh of production rights for PreussenElektra already transferred - Terms challenged
Nuclear power plant Krümmel1
88 TWh of production rights (before transfer)
PreussenElektra
39 TWh ~€27.8/MWh preliminary price
18 TWh 11 TWh 10 TWhTransferred production rights
Grohnde plant
Production rights secured until August 2021
up to 4 TWh production rights required2
Isar II plant
Production rights secured until August 2021
10-15 TWh production rights required2
Brokdorf plant
Production rights secured until June 2021
4-6 TWh production rights required2
1. Krümmel OHG is a joint venture between E.ON and Vattenfall, each party owning 50% equity share 2. Volumes shown after transfer/purchase from Krümmel, excluding minority stakes (16.7% minorities in Grohnde, 20% in Brokdorf and 25% in Isar II), as of January 2021.
64
Regulated earnings split share
65
Energy Networks Customer Solutions Other2
EBITDA 20201
€ bn
6.8 – 7.0
~75% (Quasi-)regulated earnings
• Customer Solutions and Energy Networks
diversified across European countries
• Regulated or quasi regulated Earnings share of ~75%
• Network operations in countries with strong regulatory frameworks
1. Adjusted for non operating effects; assuming no further severe lockdowns in our major markets 2. Other includes Corporate Functions & Other and Non-Core
Past delivery on guidance
1. Adjusted for non operating effects
2016 2017 2018 2019reported
EBIT1 vs. guidance€ bn
Adjusted Net Income1 vs. guidance€ bn
3.1 3.1 3.0 3.2 0.9 1.4 1.5 1.5
Guidance range
2016 2017 2018 2019reported
66
Networks Capex breakdown 2020-2022
1.11 2.01
Germany€ bn
Sweden€ bn
CEE€ bn
Maintenance Grid expansion Other
~50% investment in expansion
~50% investment in expansion
~60% investment in expansion
6.61
1. Cash effective investments; assuming no further severe lockdowns in our major markets 67
Maintaining a substantial liquidity buffer is a cornerstone of E.ON’s risk management
Bond refinancing • Early de-risking of refinancing needs for 2020
• €5bn bonds issued in January, April and May 2020
• Extensive liquidity buffer
• Back-up RCF undrawn and fully committed
• Liquidity risk minimized, even in highly volatile capital markets
• Continuous market access remains key priority-
Large volume of liquidity1
• €2.6bn in cash & equivalents
• €1.1bn in short-term securities
• €2.0bn of non-current securities
Plus further back-up RCF available
• Undrawn €3.5bn Revolving Credit Facility (RCF), fully committed by 21 banks, no MAC-clause2
• Extended by one more year in October 2020
Key takeaways
1. As per September 2020 2. MAC = Material Adverse Change 68
Benchmark bonds of E.ON Group as of Nov. 11, 20201
IssuerVolume in millions in respective currency Coupon Maturity
E.ON International Finance B.V. 570 GBP 6.500% Apr-21
innogy Finance B.V. 1,000 EUR 6.500% Aug-21
E.ON SE 750 EUR 0.375% Aug-21
E.ON International Finance B.V. 500 GBP 5.500% Jul-22
E.ON SE 500 EUR 0.000% Sep-22
E.ON SE 750 EUR 0.000% Oct-22
E.ON International Finance B.V. 2 750 EUR 0.750% Nov-22
E.ON SE 1,000 EUR 0.375% Apr-23
E.ON International Finance B.V. 488 GBP 5.625% Dec-23
E.ON SE 750 EUR 0.000% Dec-23
E.ON International Finance B.V. 800 EUR 3.000% Jan-24
E.ON SE 500 EUR 0.875% May-24
E.ON SE 750 EUR 0.000% Aug-24
innogy Finance B.V. 750 EUR 1.000% Apr-25
E.ON SE 750 EUR 1.000% Oct-25
E.ON International Finance B.V. 500 EUR 1.625% May-26
E.ON SE 750 EUR 0.250% Oct-26
IssuerVolume in millions in respective currency Coupon Maturity
E.ON SE 1,000 EUR 0.375% Sep-27
E.ON International Finance B.V. 850 EUR 1.250% Oct-27
E.ON SE 500 EUR 0.750% Feb-28
E.ON SE 750 EUR 1.625% May-29
E.ON International Finance B.V. 1,000 EUR 1.500% Jul-29
E.ON SE 750 EUR 0.350% Feb-30
E.ON International Finance B.V. 760 GBP 6.250% Jun-30
E.ON SE 500 EUR 0.750% Dec-30
E.ON SE 500 EUR 0.875% Aug-31
E.ON SE 500 EUR 0.625% Nov-31
E.ON International Finance B.V.3 975 GBP 6.375% Jun-32
E.ON International Finance B.V. 600 EUR 5.750% Feb-33
E.ON International Finance B.V. 600 GBP 4.750% Jan-34
E.ON International Finance B.V. 900 GBP 5.875% Oct-37
E.ON International Finance B.V.4 1,000 USD 6.650% Apr-38
E.ON International Finance B.V. 700 GBP 6.750% Jan-39
E.ON International Finance B.V. 1,000 GBP 6.125% Jul-39
1. All bonds ≥€500m equivalent, all bonds are listed in Luxemburg, with exception of the unlisted USD bond under 144A/Regulation S 2. The bond was increased from €500m to €750m 3. The bond was increased from £850m to £975m 4. Bond issued under rule 144A/Regulation S
69
Funding strategy
€2-4bn p.a.Volumes
• Bond refinancings• Cash utilization of asset retirement obligations
3-12 years preferredTenors
• Optimize maturity profile & interest costs• Redemptions on any single day capped at €1bn
EUR preferredCurrencies
• Predominantly Euro-based asset base
Instrument varietyDiversification
• Regular & green bonds• Private placements & promissory notes
(Schuldscheindarlehen)• Commercial paper
70
innogy bond transfer approaching 100%
71
Currency Principle (m) Maturity %-Transfer
EUR 468 2037 99%
JPY 20,000 2040 100%
GBP 570 2021 100%
GBP 500 2022 100%
EUR 750 2022 100%
GBP 488 2023 100%
EUR 800 2024 100%
EUR 500 2026 100%
EUR 850 2027 100%
EUR 1,000 2029 100%
GBP 760 2030 100%
EUR 600 2033 100%
USD 17.4 2033 100%
GBP 600 2034 100%
GBP 1,000 2039 100%
EUR 100 2042 100%
EUR 150 2043 100%
EUR 1,000 2021 100%
EUR 750 2025 100%
Consent received and transfer implemented✓
• Offer to innogy bondholders to switch to E.ON struck on highly positive investor reception: >97% votes in favor of the change to E.ON
• Two bonds fell slightly short of the required 50% quorum but received consent in adjourned meeting
• Exchange offers have already settled; implementation of the consent solicitations in Q4
Offer of bond transferExchange offerssettled✓
6Consent received in adjourned meetings
Use of proceedsEvaluate &
select projectsManagement of proceeds
Reporting
• Finance and/or refinance eligible green projects in the following eligible categories:
• Renewable energy• Energy efficiency• Clean transportation
• Project selection based on eligibility criteria
• Green bond committee:• Sustainability• Energy Networks• Customer Solutions• Group Finance
• E.ON will strive to maintain a portfolio matching/exceeding outstanding green bonds
• Projects will be added on an on-going basis
• Allocation and impact reporting after a year
• Renewal on an annual basis until full allocation of proceeds
External verification
Aligned with the ICMA Green Bond Principles1
E.ON’s Green Bond Framework
+
1. https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/ 72
PreussenElektra – Further ambition to ‘beat the provisions’
Solid track-record already until 2019
• Bundling of decommissioning activities
• Procurement successes by ‘convoy approach’
• Operational progress according to plan
Further optimization already planned and in execution
• Decommissioning preparations starting early
• Operational excellence lifting dismantling performanceto next level (e.g. by increasing industrialization)
-21
-10 -10-9
2016 2017 2018 2019
1. In 2017 implementation of KFK solution (transfer of ~€10bn to German government fund)
Nuclear Asset Retirement Obligations1
€ bn
73
9M 2020 ResultsFinancial Appendix
Segment outlook 2020 remaining year
75
Energy Networks
Germany & CEE:
• Covid-19-related lower volumes
Germany:
• Organic RAB growth
Sweden:
• Lower allowed WACC
CEE & Turkey:
• Hungary/Czech Republic: strong operational performance
• Slovakia: acquisition of VSE
Customer Solutions
All regions:• Covid-19-impact
Non-Core
PreussenElektra:
• Higher hedged prices
• Higher depreciation from purchase of production rights
1. Adjusted for non-operating effects
+
–
–
+
– +–
EBIT1 key drivers Q4 2020
–
+
E.ON 9M 2020 results
Financial highlights
1. Adjusted for non-operating effects; pro forma figures 9M 2019, not audited 2. Economic Net Debt as per 30 September 2020 and 31 Dec 2019; Economic Net Debt definition takes into account the decommissioning provisions calculated with a real discount rate of 0.0% as opposed to IFRS AROs; bonds issued by innogy are recorded at their nominal value: the amount in the consolidated balance sheets is €2.2 bn higher
76
E.ON 9M 2020 results
€ m 9M 2019
pro forma9M 2020 % YoY
Sales - 43,314 -
EBITDA1 5,004 4,966 -1
EBIT1 2,987 2,688 -10
Adjusted Net Income1 1,286 1,089 -15
OCFbIT 2,860 4,063 +42
Investments 2,825 2,374 -16
Economic Net Debt² -38,895 -42,092 -8
-2,6-1,6 -1,5
-1,4
-23,4
-0,7
-24,7
Other (incl. AROs)
END9M 2020
Transfer of Nord Stream1
into CTA
+3.5
-8.8
ENDFY 2019
+1.1
Dividend Pensions5
-8.6
+0.5
Net Investments 9M 20203
-39.4
-7.2
-8.9
-42.1
OCF9M 20202
-38.9
Transaction adjustment1
ENDFY 2019adjusted
Transaction effects4
€ bn
Temporary Economic Net Debt (END) increase largely due to squeeze-out and pensions
1. Adjustment of the underlying interest rate for selected leases 2. Excl. transactional effects 3. Net of divestments 4. Transaction effects include merger squeeze-out, locked-box, sale of German heating customer business and of Hungarian non-regulated electricity retail business (EKER) 5. Actuarial interest rates for German pensions at 1.0% (vs. 1.3% @ FY 2019), for UK pensions at 1.6% (vs. 2.0% @ FY 2019)
Asset Retirement Obligations (ARO)
Pension provisions
Net financial position
E.ON 9M 2020 results
77
-2.4
Cash adjustments3
GroupEBITDA2
OCFOCFbIT
4.1
Change in WC
-1.0
0.1
-0.6
Interest payments
0.2
Tax payments Capex FCF
5.0
3.7
1.3
Cash Conversion Rate1 in 9M 2020 at 87%
1. Cash Conversion Rate (CCR): (OCF bIT+ provision utilization nuclear) ÷ EBITDA 2. Adjusted for non-operating effects 3. Incl. non cash-effective EBITDA items, provision utilizations and payments related to non operating earnings
€ bn
87% CCR1
E.ON 9M 2020 results
78
1.705 1.556
394275
455500
9M 2019pro forma
2,3312,554
CEE & Turkey
Germany
9M 2020
Sweden
Divisions: Energy Networks
1. Adjusted for non-operating effects; pro forma figures 9M 2019, not audited
EBIT1
€ m
–9%
Drivers
Germany• Covid-19-related lower volumes
• Weather-related lower volumes
––
Sweden • Lower WACC in new regulatory period
• Higher transmission charges
––
CEE• Strong operational performance
• Covid-19-related lower volumes–
E.ON 9M 2020 results
+
€ m
9M 2019
pro forma9M 2020 % YoY
9M 2019
pro forma9M 2020 % YoY
9M 2019
pro forma9M 2020 % YoY
9M 2019
pro forma9M 2020 % YoY
Revenue - 10,461 - - 649 - - 1,922 - - 13,032 -
EBITDA1 2,687 2,600 -3 509 392 -23 713 746 +5 3,909 3,738 -4
EBIT1 1,705 1,556 -9 394 275 -30 455 500 +10 2,554 2,331 -9
thereof equity-method earnings - 177 - - 0 - - 124 - - 301 -
OCFbIT 2,049 3,082 +50 460 394 -14 762 737 -3 3,271 4,213 +29
Investments 1,315 1,352 +3 197 241 +22 371 446 +20 1,883 2,039 +8
TotalGermany Sweden CEE & Turkey
79
6589
45
312296
-48 -2
Germany
39
9M 2019pro forma
418
9M 2020
Benelux
UK
Other
378
Divisions: Customer Solutions
1. Adjusted for non-operating effects; pro forma figures 9M 2019, not audited
-10%
EBIT1
€ mDrivers
UK • Restructuring benefits
All• Weather impact on volumes
• Covid-19: sell-back of volumes (B2B) & bad debt
––
+
E.ON 9M 2020 results
€ m
9M 2019
pro forma9M 2020 % YoY
9M 2019
pro forma9M 2020 % YoY
9M 2019
pro forma9M 2020 % YoY
9M 2019
pro forma9M 2020 % YoY
9M 2019
pro forma9M 2020 % YoY
Revenue - 15,881 - - 2,019 - - 10,076 - - 6,370 - - 34,346 -
EBITDA1 407 392 -4 134 101 -25 72 97 +35 204 193 -5 817 783 -4
EBIT1 312 296 -5 89 45 -49 -48 -2 +96 65 39 -40 418 378 -10
thereof equity-method earnings - 3 - - 3 - - 0 - - 4 - - 10 -
OCFbIT 413 373 -10 60 41 -32 233 -253 -209 148 185 +25 854 346 -59
Investments 132 152 +15 32 28 -13 162 66 -59 381 254 -33 707 500 -29
Other TotalGermany Benelux UK
80
70 27
256271
9M 20209M 2019pro forma
326
PreussenElektra
298
GenerationTurkey
PreussenElektra: Hedged Prices (€/MWh) as of 30 September 2020
Non-Core business
1. Adjusted for non-operating effects; pro forma figures 9M 2019, not audited 2. NPP Emsland & Gundremmingen C
EBIT1
€ mDrivers
-9%
33
45
44
452022
2019
2020
2021 84%
52%
96%
100%
Preussen Elektra
• Higher achieved power prices
• Higher production volumes
• Higher depreciation from purchase of production rights
• Transfer of minority stakes2 to RWE
–
+
–
Turkey Generation
• One-off effect in 9M 2020
• FX effects
–
+
E.ON 9M 2020 results
–
€m
9M 2019
pro forma9M 2020 % YoY
9M 2019
pro forma9M 2020 % YoY
9M 2019
pro forma9M 2020 % YoY
Revenue - 1,028 - - - - - 1,028 -
EBITDA1 423 642 +52 70 27 -61 493 669 +36
EBIT1 256 271 +6 70 27 -61 326 298 -9
thereof equity-method earnings - 38 - - 27 - - 65 -
OCFbIT 80 394 +393 - - - 80 394 +393
Investments 148 159 +7 - - - 148 159 +7
PreussenElektra Generation Turkey Total
81
Adjusted Net Income
1. Adjusted for non-operating effects; pro forma figures 9M 2019, not audited
E.ON 9M 2020 results
€ m 9M 2019
pro forma9M 2020 % YoY
EBITDA1 5,004 4,966 -1
Depreciation/amortization -2,017 -2,278 -13
EBIT1 2,987 2,688 -10
Economic interest expense (net) -874 -836 +4
EBT1 2,113 1,852 -12
Income Taxes on EBT1 -553 -463 +16
% of EBT1 -26% -25% -
Non-controlling interests -274 -300 -9
Adjusted Net Income1 1,286 1,089 -15
82
Reconciliation of EBIT to IFRS Net Income
1. Adjusted for non-operating effects
E.ON 9M 2020 results
€ m 9M 2019 9M 2020 % YoY
EBITDA1 3.742 4.966 +33
Depreciation/Amortization/Impairments -1.534 -2.278 -49
EBIT1 2.208 2.688 +22
Reclassified businesses of Renewables -300 0 -
Interest result -583 -535 +8
Net book gains -32 218 +781
Restructuring -179 -390 -118
Mark-to-market valuation of derivatives -74 330 +546
Impairments (net) 0 -84 -
Other non-operating earnings -140 -267 -91
Income/Loss from continuing operations before income taxes 900 1.960 +118
Income taxes -354 -712 -101
Income/loss from continuing operations 546 1.248 +129
Income/loss from discontinued operations, net 1.759 -38 -102
Net income/loss 2.305 1.210 -48
Non-controlling interests -204 -208 -2
Net income/loss attributable to shareholders of E.ON SE 2.101 1.002 -52
83
Cash-effective investments1
841. Pro forma figures 9M 2019, not audited
E.ON 9M 2020 results
€ m 9M 2019
pro forma9M 2020 % YoY
Energy Networks 1,883 2,039 +8
Customer Solutions 707 500 -29
Corporate Functions & Other 87 -323 -471
Consolidation 0 -1 -
Non-Core 148 159 +7
Investments 2,825 2,374 -16
85
Economic Net Debt1
1. Economic Net Debt definition takes into account the decommissioning provisions calculated with a real discount rate of 0.0% as opposed to IFRS AROs; bonds issued by innogy are recorded at their nominal value: the amount in the consolidated balance sheets is €2.2 bn higher 2. Net figure; does not include transactions relating to our operating business or asset management
E.ON 9M 2020 results
€ m 31 Dec 2019 30 Sep 2020
Liquid funds 3,602 4,512
Non-current securities 2,354 2,005
Financial liabilities -28,947 -31,380
Adjustment FX hedging² 166 215
Net Financial Position -22,825 -24,648
Provisions for pensions -7,201 -8,616
Asset retirement obligations -8,869 -8,828
Economic Net Debt -38,895 -42,092
Economic interest expense (net)2
1. Borrowing cost that are directly attributable to the acquisition, construction or production of a qualified asset. Borrowing cost are interest costs incurred by an entity in connection with the borrowing of funds. (interest rate: 3,86%) 2. Pro forma figures 9M 2019, not audited 86
E.ON 9M 2020 results
€ m 9M 2019
pro forma9M 2020
Difference
(in € m)
Interest from financial assets/liabilities -756 -789 -33
Interest cost from provisions for pensions and similar provisions -95 -73 +22
Accretion of provisions for retirement obligation and similar provisions -57 -4 +53
Construction period interests¹ 11 6 -5
Others 23 24 +1
Net interest result -874 -836 +38
E.ON’s Proforma Financials 2019
E.ON’s Proforma Financials1 — 2019
Adjusted EBITDA1 Adjusted EBIT1
1. Adjusted for non operating effects 2. Pro forma, not audited
€ m FY 20192
Energy Networks 5,364
Germany 3,721
Sweden 692
CEE & Turkey 951
Customer Solutions 1,126
Benelux 192
Germany 648
UK -10
Other 296
Corporate Functions/Other -203
Non-Core business 617
Total 6,904
€ m FY 20192
Energy Networks 3,499
Germany 2,358
Sweden 539
CEE & Turkey 602
Customer Solutions 541
Benelux 132
Germany 487
UK -180
Other 102
Corporate Functions/Other -341
Non-Core business 366
Total 4,065
88
E.ON’s Proforma Financials1 — 2019
OCFbIT Investments (cash-effective)
1. Adjusted for non operating effects 2. Pro forma, not audited
€ m FY 20192
Energy Networks 3,149
Germany 2,254
Sweden 313
CEE & Turkey 582
Customer Solutions 1,008
Benelux 90
Germany 226
UK 211
Other 481
Corporate Functions/Other 130
Non-Core business 148
Total 4,435
€ m FY 20192
Energy Networks 4,255
Germany 2,455
Sweden 718
CEE & Turkey 1,082
Customer Solutions 378
Benelux 84
Germany 71
UK 128
Other 95
Corporate Functions/Other -657
Non-Core business 313
Total 4,289
89
E.ON’s Proforma Financials1 — 2019
At-equity contribution to adjusted EBITDA/EBIT1
1. Adjusted for non operating effects 2. Pro forma, not audited
E.ON Financials P&L
€ m FY 20192
Energy Networks 349
Germany 219
Sweden 0
CEE & Turkey 130
Customer Solutions 22
Benelux 4
Germany 6
UK 0
Other 12
Corporate Functions/Other 70
Consolidation -1
Non-Core business 125
Total 565
€ m FY 20192
Adjusted EBITDA1 6,904
Depreciation/amortization recognized in Adjusted EBIT
-2,839
Adjusted EBIT1 4,065
Economic interest expense (net) -1,304
Adjusted EBT1 2,761
Income Taxes on Adjusted EBT -724
% of Adjusted EBT 26%
Non-controlling interest on results of operations -464
Adjusted Net Income1 1,573
90
Financial calendar
March 24, 2021 Annual Report 2020
May 11, 2021 Quarterly Statement: January – March 2021
May 19, 2021 2021 Annual Shareholder Meeting
August 11, 2021 Half-Year Financial Report: January – June 2021
November 10, 2021 Quarterly Statement: January – September 2021
Important links
Presentations https://www.eon.com/en/investor-relations/presentations.html
Facts & Figures 2020 https://www.eon.com/content/.../presentations/facts-and-figures-2020.pdf
Annual Reports https://www.eon.com/en/investor-relations/financial-publications/annual-report.html
Interim Reports https://www.eon.com/en/investor-relations/financial-publications/interim-report.html
Shareholder Meeting https://www.eon.com/en/investor-relations/shareholders-meeting.html
Green Bond Framework https://www.eon.com/en/investor-relations/bonds/green-bonds.html
Financial calendar & important links
91
E.ON‘s Investor Relations Team
Verena Nicolaus-KronenbergHead of Investor [email protected]+49 152 09331400
Daniel SchallerManager Investor [email protected]+49 171 6915869
Andreas ThielenManager Investor [email protected]+49 151 67114918
Britta WöhnerManager Investor [email protected]+49 152 54607527
Martina BurgerManager Investor [email protected]+49 151 19773784
Martin JägerManager Investor [email protected]+49 162 2754355
General Contact:
+49 201 184 2806
Analysts & Institutional Investors
Event & Roadshow Management
Carmen MombourManager Investor [email protected]+49 151 16310345
Vanessa BrinkmannAssistant Investor [email protected]+49 152 09340725
Björn SiggemannManager Investor [email protected]+49 175 1996123
92
Nicola SchwarzAssistant Investor [email protected]+49 151 16310338
Disclaimer
93
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 to abide by the limitations set outin this document as well as any limitations set out on the webpage of E.ON SE on which this presentation has been made available.
This document is being presented solely for informational purposes. It should not be treated as giving investment advice, nor is it intended to provide the basis for anyevaluation or any securities and should not be considered as a recommendation that any person should purchase, hold or dispose of any shares or other securities.
The information contained in this presentation may comprise financial and similar information which is neither audited nor reviewed and should be consideredpreliminary and subject to change.
Some of the information presented herein is based on statements by third parties. No representation or warranty, express or implied, is made as to, and no relianceshould be placed on, the fairness, accuracy, completeness or correctness of this information or any other information or opinions contained herein, for any purposewhatsoever.
This presentation may contain forward-looking statements based on current assumptions and forecasts made by E.ON management and other information currentlyavailable to E.ON. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financialsituation, development or performance of the company and the estimates given here. E.ON does not intend, and does not assume any liability whatsoever, to updatethese forward-looking statements or to conform them to future events or developments.
Neither E.ON nor any respective agents of E.ON undertake any obligation to provide the recipient with access to any additional information or to update thispresentation or any information or to correct any inaccuracies in any such information.
Certain numerical data, financial information and market data (including percentages) in this presentation have been rounded according to established commercialstandards. As a result, the aggregate amounts (sum totals or interim totals or differences or if numbers are put in relation) in this presentation may not correspond in allcases to the amounts contained in the underlying (unrounded) figures appearing in the consolidated financial statements. Furthermore, in tables and charts, theserounded figures may not add up exactly to the totals contained in the respective tables and charts.