Creating the future of energy - Growth Focus - EOn
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Growth Focus Discipline Creating the future of energy 9M 2019 Results 29th November 2019
Operations fully in line with expectations
E.ON 9M 2019 results
Highlights Key Financials1
€m € bn
• Intra-year EBIT recovery fully on track to reach prior 2,352
year level (3rd quarter up 20% YoY) 2,208
39.6
• First time inclusion of innogy financials
(13 days of earnings, full balance sheet impact)
• Economic Net Debt at €39.6 bn 1,208 1,176
(including innogy net debt)
16.6
• Full year 2019 outlook adjusted for innogy
• Solution proposal for npower
• Dividend proposal of €0.46/share confirmed
EBIT Adj. Net Income Economic Net Debt2
9M 2018 9M 2019 2
1. Adjusted for non operating effects 2. Economic Net Debt as per 30 Sep 2019 and 31 Dec 2018
Transaction progressing as planned E.ON 9M 2019 results
2018 2019 2020
Voluntary
public takeover
offer (PTO)
1st Closing2
18th September
New Supervisory
and Executive Board
at innogy level
FY 2019
reporting and
CMD
ended 25th July October 25 March
th
Start of
integration Announcement of
merger squeeze out
2nd Closing2 – (a)
EGM1 innogy 2nd Closing2 – (b)
project intention 30th September
September 4 September
th
Antitrust approvals
Full legal integration
Official filing of transaction with EU EU Antitrust approval
Integration & synergies
Commission on 31st January 17th September
3
1. Extraordinary General Meeting 2. Closing 1: E.ON becomes ≥90% shareholder in innogy, RWE becomes 16.67% shareholder in E.ON (20% capital increase); Closing 2a: Legal
transfer of E.ON’s renewables assets and nuclear minority participations; Closing 2b: Legal transfer of innogy’s renewables assets, Kelag participation and gas storage assets
Proposed solution for npower E.ON 9M 2019 results
Detailed plan proposed for UK Customer Solutions: 1
• Migration of npower’s B2C and SME customers
1 onto E.ON UK platform B2C/SME B2C/SME
B2B B2B
• Carve-out of Industrial & Commercial (B2B)
2
customers to secure profitable business
2
3• Restructuring of remaining npower operations
B2C/SME
• Turnaround of operating performance by 2021 B2B B2B
• Combined E.ON UK business to achieve EBIT
of GBP at least 100m and positive free cash flow after 3
smart meter investments from 2022 onwards
B2C/SME
• Restructuring charges of up to GBP 500m
(majority to be shown in non operating result) B2B B2B
4
Customer Solutions – Solid customer growth outside UK E.ON 9M 2019 results
B2C customer numbers Growing customer base outside UK B2C customer numbers
• Since FY 2018 more than ~380k
~20m ~20m ~19m
additional B2C customer ~19m
accounts in Germany
Germany ~150k
• ~150k additional customer Germany ~230k
accounts in other markets
outside UK
Other1 ~120k
~30k
Other2
UK ~430k
UK ~450k
FY 2018 9M 2019 FY 2018 9M 2019
5
1. Incl. Sweden, Italy, Hungary, Czech Republic, Romania, Slovakia 2. Incl. Netherlands, Belgium, Poland, Hungary, Croatia, Slovenia
Energy Networks – Regulatory update E.ON 9M 2019 results
Germany Sweden
• General efficiency factors for 3rd regulatory • Carry-over de-risked after constructive
period (gas at 0.49% and electricity at 0.9%) discussions with government
have been legally challenged
• Full amount of retro-actively allowed revenues
• Higher regional court (OLG Düsseldorf) decided can now be collected subject to proper
in favor of network operators investment level to improve security of supply
• BNetzA has filed an appeal with the Federal • New allowed WACC of 2.16% (real) legally
Court of Justice challenged
• No final clarity whether 0.49%-level of general
efficiency factor will be reduced
• Direct implications for electricity expected
6
EBIT development in line with expectations E.ON 9M 2019 results
EBIT1 9M 2019 vs. 9M 2018 Key 9M Effects
€m
Energy
9M 2018 2,352 Networks +/–
• Germany: new regulatory period power,
one-off effects 2018
Energy
-47 •+ Sweden: power tariff increase
Networks
Customer Customer
-136
Solutions Solutions •– UK: regulatory effects (i.e. SVT price cap),
competitive dynamics
Renewables +45
-144
innogy Renewables
businesses2
+4 •+ Capacity additions in Germany, UK and the US
Corp. Functions •– Support scheme expiries
& Other, -22 •– Deconsolidation effects
Consolidation
Non-Core +12 Non-Core
+/–
• Preussen Elektra: higher achieved prices,
higher depreciation, absence of 2018 one-offs
9M 2019 2,208 •+ Turkey: oper. improvements (mainly hydro)
7
1. Adjusted for non operating effects 2. 13 days of innogy EBIT included
Adj. Net Income reflecting EBIT development E.ON 9M 2019 results
9M 2019
€m
Group EBIT1 2,208
Interest on
fin. assets/ -430 Stable YoY
liabilities2
Other interest
-77
expenses
Profit before
1,700
Taxes1
Income Taxes -349 Tax rate for 9M 2019 at ~21%
Minorities -175
Adjusted
1,176
Net Income1
0.54 EPS3 (€ per share)
8
1. Adjusted for non operating effects 2. Without interest accretion of nuclear provisions 3. EPS based on weighted average number of shares outstandingQ3 2019 Economic Net Debt (END) reconciliation E.ON 9M 2019 results
€ bn
Net financial position
Pension provisions
Asset Retirement Obligations (AROs)
innogy1 -21.7
-19.8
Transaction effects:
+ 1.6 bn
E.ON -8.8
-20.2 +1.9 +1.5
+3.0 -9.1
-0.1 -0.2
-1.2 -1.0 -39.6
-40.0 -0.7
-2.8
END OCF Q3 20192 Net Pensions4 IGY minority Deconsolidation Payment Other Alignment Other8 END
H1 2019 Investments buyout RES & nuclear from RWE transaction innogy END 9M 2019
Q3 20192,3 minorities5 effects6 with E.ON END
definition7
1. innogy reported economic net debt H1 2019 2. OCF/ICF including full 3rd quarter of innogy cash flows incl. divestment business 3. Net of divestments 4. Actuarial interest
rates for German pensions at 1.0%, for UK pensions at 1.9% 5. Including €0.7 bn Nuclear Business (incl. “locked box”), €1.0 bn AROs (Renewables), €0.8 bn Tax Equity Liabilities 9
(Renewables), €0.5 bn finance leases, €0.04 bn Pension Provisions 6. Payment to RWE compensating for lower than anticipated innogy dividend 7. END of innogy aligned to
E.ON END definition (excl. pension provision harmonization) 8. Including -€0.3 bn CTA fundingEconomic Net Debt outlook 2019 and beyond E.ON 9M 2019 results
Economic Net Debt 9M 2019 FY 2019 Economic Net Debt effects
AROs1 Pensions Net financial position – Restructuring Hungary (temporary effect of ~-€0.4 bn)
– Free Cash Flow (FCF) effects
+/–
-9.1 Reduction potential
through operational Broader
excellence portfolio Economic Net Debt effects 2020 and beyond
-8.8
– Merger squeeze-out
Sensitivity to
discount rate – Integration costs
changes + Transfer of Nordstream 1 into CTA
Highly regulated
-21.7 business mix + Transaction effects (e.g. remedy proceeds, locked-box
Refinancing benefits: settlement, restructuring Hungary)
€3.5 bn bonds issued
@Adjustment of full year EBIT 2019 guidance E.ON 9M 2019 results
EBIT
€3.1-3.3 bn
Exclusion of
PPA3 charge4
from EBIT &
€2.9-3.1 bn Adj. Net
Income
Technical
adjustments2
Old guidance EBIT of E.ON RES Proportional EBIT of Alignment of New guidance
FY 2019 & PEL minorities1 innogy (excl. RES, reporting practices2 FY 2019
Czech retail, Kelag &
gas storage)
11
1. PreussenElektra assets include participations in power plants Gundremmingen C and Emsland 2. Includes alignment of E.ON and innogy reporting and accounting guidelines
3. Purchase Price Allocation 4. Preliminary PPA charge: 2019: ~€0.2bn, thereafter roughly €0.7bn on averageFY 2019 segment guidance
E.ON 9M 2019 results
Effects for the remainder of 2019
Energy Networks Renewables
•+ 4Q at-equity contribution of Rampion
+• Germany: new regulatory period power
(20% stake)
+• Sweden: power tariff increases
(already implemented)
innogy
•+ Full quarter of innogy earnings contribution
Customer Solutions •– Adjustments to E.ON reporting policies
•+ Germany: impact of price adjustments
•– UK: regulatory interventions (i.e. SVT cap), Non-Core
higher restructuring ambitions
+/–
• PEL1: increased wholesale prices, higher
depreciation, one-offs in 2018, purchase of
production volumes
12
1. PreussenElektraAdjustment of Adj. Net Income 2019 guidance E.ON 9M 2019 results
Adj. Net Income
Dividend1
proposal of
€0.46/share
confirmed
€1.45-1.65 bn
€1.4-1.6 bn Technical
adjustments2
Old EBIT delta, Financial Additional Tax impact Minorities Additional New
guidance mainly expenses innogy on higher relating to innogy guidance
FY 2019 Renewables relating to interest PBT RES minorities FY 2019
vs. IGY debt expenses
transferred 13
to RWE 1. Fixed dividend per share proposal to AGM to be paid in 2020Pro-forma full year 2019 EBIT guidance E.ON 9M 2019 results
~€1.6 bn €4.0-4.2 bn
Exclusion of
PPA charge3
from EBIT &
Adj. Net
Income
€2.9-3.1 bn
Old guidance EBIT of E.ON RES innogy FY Adjustments2 Pro-forma FY
FY 2019 & PEL minorities1 2019 guidance 2019 guidance
14
1. PreussenElektra assets include participations in power plants Gundremmingen C and Emsland 2. Includes alignment of E.ON and innogy reporting and accounting guidelines
3. Preliminary PPA charge roughly €0.7bn on averageGrowth Focus Discipline 9M 2019 – Financial Appendix
Financial Highlights E.ON 9M 2019 results
€m 9M 2018 9M 2019 % YoY
Sales 21,646 23,580 +9
1
EBITDA 3,675 3,742 +2
EBIT1 2,352 2,208 -6
Adjusted Net Income1 1,208 1,176 -3
OCF bIT 3,494 2,736 -22
Investments 2,279 4,018 +76
Economic Net Debt² -16,580 -39,620 -139
1. Adjusted for non operating effects, 2. Economic Net Debt as per 30 Sep 2019 and
31 Dec 2018; Economic Net Debt definition takes into account the decommissioning
provisions calculated with a real discount rate of 0.0% as opposed to IFRS AROs; 16
bonds issued by innogy are recorded at their nominal value: the amount in the conso-
lidated balance sheets is €2.6 bn higherCash Conversion Rate in Q3 recovering as expected1 E.ON 9M 2019 results
9M 2019
€ bn
73%
3.7
-0.4 2.7
-0.6
-0.4 1.6
-0.7
-4.0
-2.4
EBITDA2 Cash Change in WC OCF bIT Interest Tax Payments OCF Capex FCF
Adjustments3 Payments
1. Cash Conversion Rate: OCF bIT ÷ EBITDA 2. Adjusted for non operating effects 17
3. Net non cash effective EBITDA items incl. provision utilizations, payments related to non operating earnings and innogy consolidation effectSegments: Energy Networks E.ON 9M 2019 results
Energy Networks Highlights
EBIT1 € m • Germany
-3%
+/–
+ New regulatory period for power
1,472 1,425 + Regulatory effects in 2018
– One-off effects in 9M 2018
Germany 755 693 • Sweden
+ Power tariff increase
Sweden 363 394
CEE & Turkey 354 338
9M 2018 9M 2019
€m Germany Sweden CEE & Turkey Total
9M 2018 9M 2019 % YoY 9M 2018 9M 2019 % YoY 9M 2018 9M 2019 % YoY 9M 2018 9M 2019 % YoY
Revenue 4,560 4,646 +2 729 748 +3 1,125 1,162 +3 6,414 6,556 +2
Details
EBITDA1 1,182 1,151 -3 476 509 +7 529 514 -3 2,187 2,174 -1
EBIT1 755 693 -8 363 394 +9 354 338 -5 1,472 1,425 -3
thereof equity-method earnings 51 48 -6 0 0 - 88 87 -1 139 135 -3
OCFbIT 1,372 898 -35 535 460 -14 523 565 +8 2,430 1,923 -21
Investments 448 597 +33 223 197 -12 283 263 -7 954 1,057 +11
18
1. Adjusted for non operating effectsSegments: Customer Solutions E.ON 9M 2019 results
Customer Solutions Highlights
EBIT1 € m • Germany Sales
-38% – Timing effect from delayed pass-on of higher grid fees
360 • UK
– Regulatory effects, mainly SVT2 price cap
Germany Sales 124
224 – Competitive dynamics
UK 143 90 + Lower restructuring expenses
51 + Effects from restructuring program
Other 93 83
9M 2018 9M 2019
€m Germany Sales UK Other Total
9M 2018 9M 2019 % YoY 9M 2018 9M 2019 % YoY 9M 2018 9M 2019 % YoY 9M 2018 9M 2019 % YoY
Revenue 4,892 5,321 +9 5,432 5,329 -2 5,483 6,072 +11 15,807 16,722 +6
Details
EBITDA1 148 120 -19 211 136 -36 231 229 -1 590 485 -18
EBIT1 124 90 -27 143 51 -64 93 83 -11 360 224 -38
thereof equity-method earnings 0 0 - 0 0 - 7 8 +14 7 8 +14
OCFbIT 236 179 -24 125 63 -50 253 194 -23 614 436 -29
Investments 10 38 +280 157 132 -16 240 387 +61 407 557 +37
19
1. Adjusted for non operating effects, 2. Standard Variable TariffNon-Core business E.ON 9M 2019 results
Non-Core Highlights
EBIT1 € m • PreussenElektra
+4%
+ Higher achieved power prices
– Higher depreciation
314 326 – One-off effects in 2018
• Generation Turkey
Preussen 256 + Operational improvements, mainly higher hydro volumes in H1
354
Elektra
70
Generation -40
Turkey 9M 2018 9M 2019 PreussenElektra: Hedged Prices
(€/MWh) as of 30 September 2019
€m PreussenElektra Generation Turkey Total
9M 2018 9M 2019 % YoY 9M 2018 9M 2019 % YoY 9M 2018 9M 2019 % YoY 2018 100% 26
Revenue 983 878 -11 0 0 - 983 878 -11
Details
EBITDA1 436 423 -3 -40 70 - 396 493 +24 2019 96% 32
EBIT1 354 256 -28 -40 70 - 314 326 +4
thereof equity-method earnings 42 40 -5 -40 70 - 2 110 - 2020 73% 46
OCFbIT 122 80 -34 0 0 - 122 80 -34
Investments 10 207 +1,970 154 0 -100 164 207 +26 2021 45% 47
20
1. Adjusted for non operating effectsAdjusted Net Income E.ON 9M 2019 results
€m 9M 2018 9M 2019 % YoY
EBITDA1 3,675 3,742 +2
Depreciation/amortization -1,323 -1,534 -16
EBIT1 2,352 2,208 -6
Economic interest expense (net) -500 -508 -2
EBT1 1,852 1,700 -8
Income Taxes on EBT1 -457 -349 +24
% of EBT 1 -25% -21% -
Non-controlling interests -187 -175 +7
Adjusted Net Income1 1,208 1,176 -3
21
1. Adjusted for non operating effectsReconciliation of EBIT E.ON 9M 2019 results
to IFRS Net Income
€m 9M 2018 9M 2019 % YoY
1
EBITDA 3,675 3,742 +2
Depreciation/Amortization/Impairments -1,323 -1,534 -16
1
EBIT 2,352 2,208 -6
Reclassified businesses of Renewables -278 -300 -8
Interest result -522 -583 -12
Net book gains 859 -32 -104
Restructuring -52 -179 -244
Mark-to-market valuation of derivatives 905 -73 -108
Impairments (net) 0 -2 -
Other non-operating earnings -81 -124 -53
Income/Loss from continuing operations before income taxes 3,183 915 -71
Income taxes -198 -359 -81
Income/loss from continuing operations 2,985 556 -81
Income/loss from discontinued operations, net 170 1,759 +935
Net income/loss 3,155 2,315 -27
22
1. Adjusted for non operating effectsCash effective investments1 E.ON 9M 2019 results
€m 9M 2018 9M 2019 % YoY
Energy Networks 954 1,057 +11
Customer Solutions 407 557 +37
Renewables 698 583 -16
innogy businesses 0 53 -
Corporate Functions & Other 56 1,561 -
Consolidation 0 0 -
Non-Core 164 207 +26
Investments 2,279 4,018 +76
23
1. Investments from innogy transaction included in Corporate Functions & OtherEconomic Net Debt1 E.ON 9M 2019 results €m 31 Dec 2018 30 Sep 2019 Liquid funds 5,423 5,547 Non-current securities 2,295 1,206 Financial liabilities -10,721 -28,537 Adjustment FX hedging² -28 77 Net financial position -3,031 -21,707 Provisions for pensions -3,261 -8,818 Asset retirement obligations -10,288 -9,095 Economic Net Debt -16,580 -39,620 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 €2.6 bn higher 2. Net figure; does not include transactions relating to our 24 operating business or asset management
Economic interest expense (net) E.ON 9M 2019 results
Difference
€m 9M 2018 9M 2019
(in € m)
Interest from financial assets/liabilities -436 -430 +5
Interest cost from provisions for pensions and similar provisions -48 -47 +1
Accretion of provisions for retirement obligation and similar provisions -59 -45 +15
Construction period interests¹ 14 13 -2
Others 28 18 -11
Net interest result from innogy businesses 0 -17 -17
Net interest result -500 -508 -8
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: 25
5.37%).Financial Liabilities E.ON 9M 2019 results
Liquidity Sources (as of 9M 2019) Maturity profile (as of end 9M 2019)1
€ bn € bn
12.1
Liquid funds ~5.5
Non-current securities ~1.2
Total ~6.7
Syndicated loan (undrawn) 3.50
2.8
2.4 2.2
€ / $ Commercial Paper 1.4
10 / 10 1.0 1.3
programs 0.8
Acquisition facility
1.75 2019 2020 2021 2022 2023 2024 2025 ≥2026
(undrawn)
E.ON innogy
1. 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) 26
and innogy EIB loansSuccessful financing 2019
2019
Q3 Q4
August 21 (Green Bond) October 17 October 31
1 • Size: €1.5bn 2 • Size: €1.5bn 3 • Size: €500mn
Bonds
• Term: 5Y & 10.5Y • Term: 3Y & 7Y • Term: 12Y
• Yield: -0.149% p.a. • Yield : -0.019% p.a. • Yield: 0.741% p.a.
& 0.373% p.a. & 0.375% p.a.
October 24
Syndicated ESG-linked
Loan
Revolving Credit Facility
• Size: €3.5bn
Integrated financing of new E.ON • Term: 5+1+1Y
EUR 3.5bn bond issuances in 2019 securing favorable financing conditions
Bond financing well diversified across maturities
Successful refinancing of RCF1 with ESG-element, replacing E.ON’s and innogy’s previous RCFs
27
1. Revolving Credit FacilityE.ON Investor Relations contacts
Dr. Stephan Schönefuß T +49 (201) 184 28 22
Interim Head of Investor Relations stephan.schoenefuss@eon.com
Martina Burger T +49 (201) 184 28 07
Manager Investor Relations martina.burger@eon.com
Sebastian Gaßner T +49 (201) 184 28 05
Manager Investor Relations sebastian.gassner@eon.com
Andreas Thielen T +49 (201) 184 28 15
T +49 (201) 184 2806
Manager Investor Relations andreas.thielen@eon.com investorrelations@eon.com
28Financial calendar & important links
Financial calendar
March 25, 2020 Annual Report 2019 & Capital Markets Day (London)
May 12, 2020 Quarterly Statement: January – March 2020
May 13, 2020 2020 Annual Shareholders Meeting
August 12, 2020 Half-Year Financial Report: January – June 2020
November 11, 2020 Quarterly Statement: January – September 2020
Important links
Presentations https://www.eon.com/en/investor-relations/presentations.html
Facts & Figures 2019 https://www.eon.com/content/.../presentations/facts-and-figures-2019.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
Transaction Website: http://www.energyfortomorrow.eu/
29Disclaimer
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 out
in 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 any
evaluation 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 considered
preliminary 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 reliance
should be placed on, the fairness, accuracy, completeness or correctness of this information or any other information or opinions contained herein, for any purpose
whatsoever.
This presentation may contain forward-looking statements based on current assumptions and forecasts made by E.ON management and other information currently
available to E.ON. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial
situation, development or performance of the company and the estimates given here. E.ON does not intend, and does not assume any liability whatsoever, to update
these 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 this
presentation 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 commercial
standards. 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 all
cases to the amounts contained in the underlying (unrounded) figures appearing in the consolidated financial statements. Furthermore, in tables and charts, these
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