E.ON Delivering step by step
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E.ON Delivering step by step
Key investment highlights
Highly stable business profile with ~2/3 of EBITDA
from regulated, long-term contracted businesses1
Well positioned to profit from megatrends digitization,
decentralization, e-mobility, renewables
Deleveraging: from 5.3x Net Debt/EBITDA (FY 2016) to
~4.0x Net Debt/EBITDA (mid-term target)
Potential overachievement of deleveraging targets
offers potential room for profitable growth and
dividends
Attractive dividend payout ratio (minimum of 65%2)
Rigid focus on capital return and discipline
1. Including Energy Networks and a portion of Renewables and Heat 2. Based on Adjusted Net Income, from FY 2018 (payable in 2019) onwards 2
Highly stable business profile
Business profile FY EBITDA 20161
High share of regulated and long-term contracted
earnings (~2/3 of EBITDA )
Operations in Energy Networks under stable, well
15%
Energy
Networks
established frameworks in low risk markets with
strong regulatory track record
12%
€3.7bn 51%
Customer
Solutions
PreussenElektra (non-core)
Predominantly quasi-regulated or contracted 21%
Renewables
earnings in Renewables and heat operations
Remaining merchant exposure in Renewables and
PreussenElektra largely hedged ~2/3 from regulated/long-term contracted
businesses2
1. Adjusted for non operating effects, representation in pie charts excluding Corporate Functions/ Other; total figures including Corporate Functions/ Other, 2. Including
Energy Networks and a portion of Renewables and Heat 3
E.ON at a glance
Key financials FY ‘16 Energy Customer
Renewables
Networks Solutions
15%1
Adjusted EBIT €bn
57%1 28%1
3.1
>22m Customers across >6GW Renewable capacities
Adjusted net income €bn
Europe with strong cash delivered across Europe and
~€19bn Regulated asset base flow generation the US
0.9 mainly in Germany and
Sweden New solutions: operator of
largest e-mobility charging 3 GW onshore pipeline to
network in Denmark drive “growth” in the US
€1.7bn EBIT (FY 2016) €0.8bn EBIT (FY2016) €0.4bn EBIT (FY2016)
1. FY2016 EBIT adjusted for non operating effects, representation in pie charts excluding Corporate Functions/ Other 4
Delivering step by step…
Potential over-achievement of deleveraging could
create balance sheet head room
Economic net debt
€ bn
26.3
Debt
Reduction
19.7 Debt reduction measures
1
+ Monetization of Uniper shares ~3.8
~5.3x
NFT3
~€2.85bn
+ Transfer of NS12 into CTA ~1.0
EBITDA ABB4
~€1.35bn > 4.0x ~4.0x + Nuc. decommissioning cost ~1.0
EBITDA EBITDA savings
+ Additional measures (mainly
~1.0
non-core disposals excl. Urenco)
No hybrid issuance necessary
FY 2016 9M 2017 post potential balance mid term
deleveraging sheet head room target
1. Based on share price of €22 (Fortum’s bid for E.ON’s Uniper Shares), 2. Nordstream 1 stake, 3. Nuclear Fuel Tax, 4. Accelerated Book Build 6
Raising payout and striving for dividend growth
Payout ratios by E.ON and peers
Dividend policy:
80% • Raising payout ratio to a minimum of 65%2
Peer group1 • Striving for payout ratio in line with peers
• Specification of exact range with FY2017
65% results
E.ON target
60% • Targeting absolute dividend growth (base year
Previous payout E.ON 2017)
50% - 60%
50% • Strong alignment of management and investors
through E.ON Focus
1. Peer group: Centrica, Enel, EDP, Iberdrola, innogy, SSE, 2. Based on Adjusted Net Income, from FY 2018 (payable in 2019) onwards 7
Capex budget under review
Medium-term – Gross capex
€ bn
∑ ~10.0 -20% ∑ ~8.0 Strict focus on capital discipline across all business units
CAPEX budget for the mid-term under review
Update with FY17 results
2016 2017 2018 2017 2018 2019
2017 – Gross capex
€ bn Energy Networks investments of 1.6x regulatory depreciation
driven by new renewables connections, grid maintenance and
1.5 digitization
0.7 3.6 Customer Solutions investments in heat and new solutions (i.e.
1.4
contracted onsite generation) and IT upgrades in UK/Germany
Renewables investments : European offshore (~800 MW) and
Energy Networks Customer Solutions Renewables Group
US onshore (~500 MW) 8
Energy Networks: Multi-decade growth
Mega trends support multi decade growth RAB growth: potential for higher replacement capex on
top of continuing network extensions
Mega trends driving multi decade growth
Emergence of bi-directional flows as opposed to the purely one-
directional flows in the past
Higher complexity of asset management, asset operations and asset Example: Power RAB in Germany
optimization
€ bn +3-4% p.a.
Renewables build out
Majority of renewables connected to the distribution
networks (instead of the transmission networks) +2-3% p.a.
Increasing role of distribution system operators (DSOs) vs.
the transmission system operators (TSOs) for overall 8.0
€100-200m p.a.
system optimization add. capex
Smart meter roll-out 7.1 potential on back
of improved
Sector coupling regulation
Electrification of e.g. heating, cooling and transport via heat
pumps and electric cars
DSO is in a preferred role enabling a system-optimal use 2011 2016 >2020
since all this equipment is connected to the DSO networks
9
CS: Very good progress and growth also from
asset-backed solutions
District Heating / B2M
Heat contributes ~20% of Customer Solutions EBIT
Strong district heating business in Sweden, Germany, UK with yearly EBIT of ~€130m
Stable and resilient earnings profile often based on network assets
€130m
New €250m capex project in Högbytorp close to Stockholm to be finalized
in 2019; 100 MW CHP plus district heating network extension ROCE: >10%
Energy Solutions B2B Order intake to pick up significantly
Focus on industrial generation (6-120 MW CHPs), on-site generation solutions
(small/medium CHPs, PV), energy and CO2 efficiency and flexibility >€1bn
Order intake1 YTD of ~€0.4bn on track to double order intake to >€1bn yoy in 2017
2015 2016 2017
E-Mobility
Leading E-Mobility player in Denmark (>50% market share)
Established strong partnerships (e.g. Clever and Sixt)
Roll-out of service offerings to other E.ON markets
Aim for leading role in developing role in developing Europe’s charging infrastructure
1. TCV: Total contract value 10Renewables: Risk & return focus
Focus on PPA and FiT secured pipeline
US onshore
Safe-harbored pipeline of > 3,000MW with 100% PTC
support
New project Stella (201MW) with FID expected in Q3-17
~500 MW on track for completion in 2017 3.2 GW
Europe onshore
Opportunistic approach
Recent example: FID on Morcone in Italy (57 MW, FiT of 66
€/MWh for 20 years) 2.1 GW
Several hundred MW potential (e.g. in Scotland and Sweden)
Highlights
5.3 GW Operated capacity1
Offshore
Stringent risk & return discipline 4.6 GW Owned capacity2
~800MW on schedule to be operational in 2018/19 1.1 GW Offshore capacity
3.5 GW Onshore + PV capacity
1. Operated sites, where E.ON is the operator, regardless the ownership share, 2. Pro rata 11Embedding operational excellence and establishing a
strong performance culture: the Phoenix project
Scope Targets Phoenix well on track
€400m
Controllable cost1 baseline
€ bn • Phoenix target: €400 m EBIT
contribution p.a. from 2018 onwards
5.3 ~€300m
• About €300 m predominantly
from central overhead & support ~€40m
4.1 ~€30m
functions ~€30m
• Restructuring of pension plans & H1 2017 Q3 2017 Q4 2017 2018 Total
1.2 other measures deliver ~€100 m
Beyond Phoenix
Performance Culture to be sustainably embedded
across all functions
Total E.ON Costs in
scope of • Focus on operational excellence
Phoenix • Improve customer centricity
• Digitization to improve processes and customer
experiences
1. Controllable Costs include operational costs that management can meaningfully influence, such as material expenses, consultancy and personnel expenses. Margin-
effective components such as fuel costs as well as cost item that are largely uncontrollable by the management are not included. 12Outlook 2017 confirmed
Outlook 2017 Effects for the remainder of 2017
Energy + Regulatory effects (e.g. pensions),
Networks lower maintenance costs
€2.8-3.1 bn + Tariff increase in Sweden
+ Positive development in CEE
Customer
+ Price increases in Germany & UK, focus
EBIT1 Solutions
on efficiency
– Competitive dynamics in UK
Renewables
+ Normalizing wind yields
€1.2-1.45 bn
Adj. Net
Income1 – Lower hedging prices
– Additional depreciation of asset
retirement costs
13
1. Adjusted for non operating effectsE.ON Focus – Our basis for steering the company
• Update of E.ON Focus with FY 2017
results
• Increased payout ratio to minimum of
65%4
• Striving for payout ratio in line with
peers (specification of exact range with
FY 2017 results)
• Target of absolute dividend growth
(base year 2017)
• Strong alignment of management and
investors
E.ON KPIs without Uniper contribution, 1. Adjusted for extraordinary effects and divested operations, FY 2017 guidance range as basis for medium-term outlook, 2. OCFbIT 14
divided by EBITDA, 3. Based on EBIT (= pre-tax), 4. Based on Adjusted Net Income, from FY 2018 (payable in 2019) onwards, 5. Total Shareholder ReturnSegments
Energy Networks at a glance
Highlights EBIT1 in m€ +18%
Germany EBIT 9M 20171,2
1.417
1.196
+ Regulatory benefits
Germany 788
+ Lower maintenance cost 638
70% Sweden
Sweden 288 345
CEE & Turkey
+ Tariff increases 270 284
CEE & Turkey 9M 2016 9M 2017
+ Positive effects in Czech Republic, Hungary Further key financials1 in m€
– One-off effect (book loss on hydro power plant 2.973
2.601
divestment), low hydro flows and FX in Turkey
1.923 2.135
866 864
EBITDA OCFbit3 Economic
Investments
1. Adjusted for non operating effects 2. Does only cover the three core businesses, Energy 9M 2016 9M 2017
Networks, Customer Solutions and Renewables 3. Operating cash flow before interest and
taxes. 16Energy Networks: E.ON has a strong
European regulated asset base
Well diversified footprint Presence in countries with AAA rating/ catch-up potential
Regulated asset base (€ bn) EBIT 2016 (€ bn) ~ 23%
~ 24%
~ 54% 0.4 1.7
Sweden Germany 0.9 0.4 IG4
AAA
€3.9 bn2 €10.7 bn
AAA
GER SWE CEE 5 Total
% of Total Energy Networks EBIT
~€19 bn1 E.ON operates 858,000 networks km
GER SWE CEE3
Distributed Power 68 37 45
volumes (TWh)6 Gas 107 5 44
CEE (CZE, SVK, HUN, ROM) Grid length Power 349 136 269
€4.4 bn3 (‘000 km) Gas 58 2 44
1. Current total 2016 RAB of country/region - 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. 2. Converted at 17
SEK/EUR rate of 9.46, 3. Hungary converted at EUR/HUF of 311.4, Czech Republic converted at EUR/CZK of 27.0, and Romania converted at EUR/RON of 4.5; Including
100% of Slovakia, not including Turkey , 4. IG = Investment Grade; Except of Hungary and Turkey, 5. Including at equity income from Slovakia and Turkey, 6. Volumes
including grid lossesPredictable earnings generated from RAB-
based returns
Pro-forma allowed WACC as solid base1 Regulatory stability in the near term
Start of next regulatory period (Power)
2017
Germany 5.9%2
% of Total EBIT 2016
2018
Sweden 4.56%3
2019
CEE 4.7% - 8.0%4 ~90%
2020
1. Power WACC for latest regulatory period. In general, allowed WACCs from different regulatory regimes are not directly comparable (even if they are adjusted for pre-tax/post-tax of
real/nominal) because they are applied on RABs that are derived from different regulatory accounting rules, 2. Pro-forma calculated, nominal WACC, pre corporate tax and pre commercial
tax. Instead of using a WACC-approach the German regulator publishes allowed equity returns. WACC figures for existing (Return on equity: 7.14% pre corporate tax and after commercial
tax) and new investments (Return on equity: 9.05% pre corporate tax and after commercial tax) are assuming c. 4% cost of debt and a 60/40 debt/equity capital structure. The pro-forma 18
WACC figure of 5.9% is then derived by weighting the share of existing assets (WACC: 5.7%) and new assets (WACC: 6.5%), 3. Pre-tax real WACC for Sweden of 4.56%; Current WACC
challenged in court by network operators, 4. Hungary: pre-tax real WACC 4.69%, Czech Republic: pre-tax nominal WACC 7.951%, Romania: pre-tax real WACC 7.7%, Slovakia: pre-tax
nominal WACC 6.47%Customer Solutions at a glance
Highlights EBIT1 in m€ -36%
Germany EBIT 9M 20171, 2 548
+ Price increase in Q2 2017 Germany 144
353
– Lower power margins due to 17% UK 227 93
increased TSO fees 144
– Lower gas margin due to Other 177 116
price decrease in Nov 2016
9M 2016 9M 2017
UK
+ Stabilizing customer numbers & price increases in Q2 Further key financials1 in m€
1.140
2017
– FX weakening after Brexit decision & price cap on PPM 763 732
584
customers 392 350
Other
– Energy procurement crisis in Romania in Q1 2017
EBITDA OCFbit3 Economic
– Higher gas procurement costs in Eastern Europe Investments
9M 2016 9M 2017
1. Adjusted for non operating effects 2. Does only cover the three core businesses, Energy
Networks, Customer Solutions and Renewables 3. Operating cash flow before interest and 19
taxes.Customer Solutions: Introducing new
solutions
E.ON Aura: PV & storage B2B Large: continuously gaining traction E-mobility: gearing up
All-in-one solution including PV, battery, Significant sales growth with tailor- Established dedicated unit to take
energy management app, service & made energy solutions (on-site leading role in developing Europe’s
guarantee package and green electricity generation, energy efficiency, flexibility, charging infrastructure
tariffs storage,…)
E.ON has extensive experience in e-
Successful launch and scaling up across Diversified portfolio of customers (auto mobility market leader in Denmark
Germany suppliers, tires, chemical, retail,…) (2,500 charging points)
Introduction of virtual storage product Innovative solutions like e.g. fuel cells & Data-based development of services for
E.ON SolarCloud battery storage further markets
10x increase in unit sales in 2016 2017 ambition: new contracts with Partnerships with car rental company
Target 2017: 10-15% market share several hundred million in total revenues Sixt and e-mobility specialists 20Customer Solutions addresses customer
needs across different segments
B2C &
B2B SME Energy Sales
Power & Gas
Heat
District Heating,
B2B Large Local Heating
& B2M
Foundation New Solutions
21Customer Solutions: Financial highlights
Adjusted EBIT1 by business pillars
€bn
Energy sales 2016 0.3 0.3 ~0.71 Energy sales financials
€bn
Gross Margin
Heat 2016 0.1 2016 1.2 1.3
OPEX2
Total Adj. EBIT 2016 0.8 2016 0.8 1.0
UK Continental Europe
1. Adjusted for non-operating earnings; Slight differences may occur due to rounding, 2. Costs to serve, costs to acquire and all other cost related to running the energy
sales business including D&A 22Renewables at a glance
Highlights
EBIT 9M 20171, 2 EBIT1 in m€ -20%
Offshore
12% 309
– Arkona book gain in Onshore/Solar 66 248
Q2 2016 62
– Low wind conditions in
Offshore/Other 243
the UK 186
Onshore
+ COD of Colbeck’s Corner in May 2016 9M 2016 9M 2017
+ Higher production of US wind farms & better wind Further key financials1 in m€
conditions in Europe 961
584 637
508 525 540
1. Adjusted for non operating effects 2. Does only cover the three core businesses, Energy EBITDA OCFbit3 Economic
Networks, Customer Solutions and Renewables 3. Operating cash flow before interest and Investments
taxes. 9M 2016 9M 2017 23E.ONs capabilities in most attractive
technologies and markets
Geography Technology Business model
2.1 GW Wind Onshore
Wind Offshore
PV
3.2 GW
• Focus on Europe & North America • Focus on Onshore wind, off-shore wind & • Integrated renewables player
utility-scale PV
• Stable countries / low-risk • Portfolio optimization strategy, bringing:
• Strong E.ON capabilities and experience
• Still attractive returns achieved - Scale advantages
• Capture trends in line with E.ON’s - Maintain capabilities
capabilities / markets
- Value creation
- Reduce cluster risk
24Segments: PreussenElektra E.ON 9M 2017 results
Highlights +3%
– Lower volumes due to Brokdorf outage EBIT1 in m€ 345 357
– Lower achieved power prices
– Additional depreciation of asset retirement costs
(ARC) Germany
+ End of nuclear fuel tax payments in 2016
+ One-off effects in relation to court case & KFK
solution 9M 2016 9M 2017
Further key financials1 in m€
497
Hedged Prices Germany (€/MWh) as of 30 Sept 2017 410
259
2016 100% 37
12 10
2017 100% 32
2018 94% 27
-7.069
2019 62% 28
EBITDA OCFbit2 Economic
Investments 25
9M 2016 9M 2017
1. Adjusted for non operating effects 2.Operating cash flow before interest and taxes.PreussenElektra: Asset overview
Geographic presence in Germany Overview nuclear plants
Brunsbüttel
Brokdorf
Stade Krümmel
Unterweser
Hannover
Emsland
Grohnde
Würgassen
Grafenrheinfeld
Isar 1/2
Gundremmingen A/B/C
Active and operated by Active and minority share
PreussenElektra PreussenElektra
Shut down Decommissioning
1. Atomgesetz, 2. Start-up year 1971, transfer to Preußische Elektrizitäts-Aktiengesellschaft in 1975 26Nuclear decommissioning is no limitation for dividends
or capex
€ bn Current approach
• Nuclear decommissioning provisions are part of E.ON’s economic net debt (END)
Current
~0.4-0.6
• Utilization of nuclear provisions is currently part of operating cash flow and thus
implies a burden for the financial leeway
EBITDA1 Utilization OCF bIT
of nuclear
provisions
Economic view
• However, economically the utilization is comparable to a redemption of debt and
thus has features of financing cash flow
Economic • Nuclear decommissioning could therefore be paid and replaced with financial debt
view (END neutral) and is thus no limitation for dividend or capex
EBITDA1 OCF bIT
1. Adjusted for non operating effects 27Discount rates for nuclear provisions
Build up of provisions status quo Build up of provisions post KFK1
Real discount rate: Real discount rate:
+0.9% -0.9%
Total costs
in t0 Total costs
in t0
t0
t0
t+1 t+2 t+3 t+100 t0 t+1 t+2 t+n
Accretion Storage Decommissioning Accretion Decommissioning
Duration effect
• Remaining provisions with shorter duration
• Real discount rate of -0.9% (2015: +0.9%) increases provisions to €11.2 bn (new END definition: €10.1 bn2 with real discount rate of 0.0%)
1. Utilization not taken into account, 2. Current cost value used for FY 2016 END definition 28KFK solution with positive impact on
adjusted net income
1. Nuclear fund (KFK) 2. Discount rates 3. Additional asset retirement cost (ARC)
Storage related provisions, € bn ~10 Decommissioning provisions, € bn ARC € bn
11.2 1.0
7.8 2.0 0.2 9.4 9.7
0.3 1.5
Provisions Premium1 Provision Payment FY 2015 Net accr. 9M 2016 Increase of FY 2016 2016 2017 2018 2019 2020 2021 2022
interest cost Amount1 charge provisions
• Remaining provisions with shorter duration • Duration effect increases Asset Retirement
• Payment amount has been transferred to • Real discount rate of -0.9% (2015: +0.9%) Costs (ARC)
government fund on July 3rd 2017 increases provisions to €11.2 bn (new END • Additional ARC are capitalized as of Q4 2016
definition: €10.1 bn3 with real discount rate of • Annual depreciation over remaining lifetime of
0.0%) nuclear plants
• Accretion of interest (4.4% p.a.) on €7.8 bn • Reduces accretion charges by ~€350 m4 p.a. • Reduces non-core EBIT by ~€185 m p.a.
stops as of 1 Jan 2017 • Accretion charges based on risk free rate5
• Increases net income by ~€200-250 m2 p.a. • Quarterly fluctuations of provisions
29
1. Excluding €0.2 bn for minority shareholders, 2. Net effect, depending on refinancing costs, 3. Current cost value used for FY 2016 END definition, 4. Depending on discount
rate to be applied, 5. Risk-free discount rate of ~0.5%Financials 9M 2017 Results
9M 2017 Results
8th November 2017Solid 9M 2017: well on track to achieve FY 2017 target
E.ON 9M 2017 results
Highlights Key Financials1
€m
Solid EBIT development: + 13% Q3 2017 vs 3,640 3,540
Q3 2016
Adj. Net Income up ~50% YoY
2,311
2,117
Economic Net Debt reduced to €19.7 bn
(vs. €21.5 bn in H1 2017)
965
FY 17 guidance confirmed:
641
EBIT €2.8-3.1 bn, Adj. Net Income €1.2-1.45 bn
EBITDA EBIT Adj. Net Income
9M 2016 9M 2017 32
1. Adjusted for non operating effectsCatch-up continues in Q3 2017 E.ON 9M 2017 results
EBIT1 9M 2017 vs. 9M 2016 Key 9M Effects
€m
9M 2016 w/o Energy
2.282 + Higher regulated revenues in Germany and
div. operations Networks
CEE
Energy + Tariff increases in Sweden
221
Networks
Customer + Price increases in Germany and UK
Customer Solutions – Higher costs (e.g. ECO2), PPM3 cap,
-195
Solutions competitive dynamics in UK, Energy
procurement crisis in Romania (Q1 2017)
Renewables -61 165
Renewables
Corp. Functions
& Other, -142 – Arkona book gain in Q2 2016 (offshore)
Consolidation
Preussen
Elektra 12 – Lower prices & volumes, additional
depreciation of asset retirement costs (ARC)
9M 2017 2.117 + End of nuclear fuel tax, one-off effects in
relation to court case & KFK solution
33
1. Adjusted for non operating effects, 2. Energy Company Obligation (ECO) 3. Prepayment Meter (PPM)Adjusted Net Income supported by lower interest E.ON 9M 2017 results
accretion and taxes
9M 2017
€m
Group EBIT1 2.117
Interest on ~€ 55m decline yoy mainly due to lower interest income
fin. assets/ -522
liabilities2
Other interest ~€600m improvement yoy mainly due to significant
-53
expenses lower interest accretion of nuclear provisions and other
interest expenses
Profit before
1.542
Taxes1
Income Taxes -386 Tax rate of 25% (vs. 32% in 9M 2016)
Minorities -191
Adjusted net income up 51% over prior year
Adjusted
965
Net Income1
€0.46 EPS (€ per share)
34
1. Adjusted for non operating effects, 2. Without interest accretion of nuclear provisionsEND improves significantly due to high cash flow and E.ON 9M 2017 results
refund of nuclear fuel tax
END1 9M 2017 vs. FY 2016
€ bn
+6.6
-11.2
Operating Cash Flow:
-3.6
-21.4 -3.3
-4.9
0.6
3.4 -19.7
-4.0
3.5 -10.3 10.2
-0.9
-26.3 1.35 0.4
0.2
-2.2
-0.5
END FY OCF2 Cash impact KFK Investments ABB5 Dividend Divestments Pensions AROs6 Others END 9M
2016 of NFT payment to 2017
refund3 government
fund4
AROs Pension provisions Net financial position
1. Economic net debt definition takes into account the decommissioning provisions calculated with a real discount rate of 0.0% as opposed to IFRS ARO’s. 2. OCF adjusted for 35
KFK and NFT effects, 3. Nuclear Fuel Tax (NFT) including positive interest income effect, before taxes and payment to minorities 4. Kommission zur Überprüfung der
Finanzierung des Kernenergieausstiegs (KFK), 5. Accelerated Book Build (ABB), 6. Includes transfer of nuclear storage liabilities to government fundAppendix Financial Details
Appendix: Table of Contents E.ON 9M 2017 results
38 39
Financial Cash
Highlights Conversion
40 41
Energy Customer
Networks Solution
42 43
Preussen
Renewables
Elektra
44
Financial
Appendix
37Financial Highlights E.ON 9M 2017 results
EBIT Adj. Net Income
• Energy Networks: +18% YoY. • €324 m above last years
Higher regulated revenues in 9M result
€m 9M 2016 9M 2017 % YoY
Germany and CEE and tariff • Improvement YoY mainly
increases in Sweden driven by significant lower
Sales 28,198 27,937 -1 • Customer Solutions: -36% YoY. interest accretion of
1 Lower margins and increased nuclear provisions, other
EBITDA 3,640 3,540 -3
competitors dynamic interest expenses and a tax
EBIT
1
2,311 2,117 -8 • Renewables: -20% YoY. rate of 25% (vs. 32% in 9M
1 Arkona book gain in Q2 2016 and 2016)
Adjusted net income 641 965 +51
lower wind conditions
OCF bIT 3,827 -3,091 -181
Investments
Investments 1,981 2,222 +12 OCF bIT • Energy Networks: €864 m
• Cash provided by operating (vs. €866 m YoY)
Economic net debt ² 26,320 19,699 -25
activities €6.3 bn below prior- • Customer Solutions: €350
year level m (vs. €392 m YoY)
• Key drivers: €10.3 bn payment • Renewables: €961 m
to nuclear fund (KFK3) (-) and (vs. €637 m YoY )
€3.4 bn4 nuclear fuel tax (NFT)
1. Adjusted for non operating effects, 2. Economic net debt as per 31 Dec 2016 and 30 refund (+)
Sept 2017; Economic net debt definition takes into account the decommissioning
provisions calculated with a real discount rate of 0.0% as opposed to IFRS ARO’s 3.
Kommission zur Überprüfung der Finanzierung des Kernenergieausstiegs (KFK) 4. Nuclear 38
Fuel Tax (NFT) including positive interest income effect, before taxes and payment to
minoritiesHigh cash conversion rate2 of 120% supported by E.ON 9M 2017 results
strong operating cash flow
9M 2017
€ bn
+120%
4.2
3.5 0.9 -0.3 3.5
-0.3
-0.2
-2.2
1.3
EBITDA1 Cash Changes in WC OCF bIT4 Interest Tax Payments OCF Capex FCF
Adjustments3 Payments
1. Adjusted for non operating effects, 2. Cash Conversion Rate: OCF bIT / EBITDA, adjusted for NFT and KFK effects, 3. Net non cash effective EBITDA items incl. provision 39
utilizations, 4. Adjusted for KFK and NFT effectsSegments: Energy Networks E.ON 9M 2017 results
Energy Networks Highlights
EBIT1 € m +18% • Germany:
+ Regulatory effects
1,417 + Lower maintenance costs
1,196
• Sweden:
788
Germany 638 + Tariff increases
• CEE & Turkey:
Sweden 288 345
+ Tariff increases in Hungary
CEE & Turkey 270 284 + Higher allowed revenues in Czech Republic & Romania
9M 2016 9M 2017
€m Germany Sweden CEE & Turkey Total
9M 2016 9M 2017 % YoY 9M 2016 9M 2017 % YoY 9M 2016 9M 2017 % YoY 9M 2016 9M 2017 % YoY
Revenue 10,288 10,797 +5 736 831 +13 1,183 1,239 +5 12,207 12,867 +5
Details
1
EBITDA 1,084 1,217 +12 411 467 +14 428 451 +5 1,923 2,135 +11
EBIT 1 638 788 +24 288 345 +20 270 284 +5 1,196 1,417 +18
thereof Equity-method earnings 54 60 +11 0 0 - 47 -7 -115 101 53 -48
OCFbIT 1,809 2,106 +16 398 443 +11 394 424 +8 2,601 2,973 +14
Investments 517 396 -23 180 228 +27 169 240 +42 866 864 -0
40
1. Adjusted for non operating effectsSegments: Customer Solutions E.ON 9M 2017 results
Customer Solutions Highlights
EBIT1 € m • Germany:
-36%
– Lower power margins due to increased TSO2 fees (Q1 2017)
548 – Lower gas margin due to price decrease in Nov 2016
Germany 144 + Price increases as per Q2 2017
353
• UK:
UK 227 93
– Higher ECO3 costs & FX weakening
144
– Price cap on PPM4 customers
Other 177 116 – Competitive dynamics
9M 2016 9M 2017 • Other:
– Energy procurement crisis in Romania in Q1 2017
€m Germany UK Other Total
9M 2016 9M 2017 % YoY 9M 2016 9M 2017 % YoY 9M 2016 9M 2017 % YoY 9M 2016 9M 2017 % YoY
Revenue 5,526 5,424 -2 5,676 5,083 -10 4,877 4,972 +2 16,079 15,479 -4
Details
1
EBITDA 192 147 -23 297 218 -27 274 219 -20 763 584 -23
EBIT 1 144 93 -35 227 144 -37 177 116 -34 548 353 -36
thereof Equity-method earnings 0 0 - 0 0 - 8 11 +38 8 11 +38
OCFbIT 352 226 -36 283 229 -19 505 277 -45 1,140 732 -36
Investments 47 42 -11 158 142 -10 187 166 -11 392 350 -11
41
1. Adjusted for non operating effects 2. Transmission system operator (TSO) 3. Energy Company Obligation (ECO) 4. Prepayment meter (PPM)Segments: Renewables E.ON 9M 2017 results
Renewables Highlights
EBIT1 € m • Offshore:
-20%
– Arkona book gain in Q2 2016
309 – Lower wind conditions in UK, FX (GBP) weakening
248 • Onshore:
Offshore/Other 243 + COD of Colbeck’s Corner in May 2016
186 + Higher production of US wind farms
– Lower wind conditions in Europe (esp. Italy & UK)
Onshore/Solar 66 62
9M 2016 9M 2017
€m Onshore Wind / Solar Offshore Wind / Others Total
9M 2016 9M 2017 % YoY 9M 2016 9M 2017 % YoY 9M 2016 9M 2017 % YoY
Revenue 567 691 +22 455 439 -4 1,022 1,130 +11
Details
1
EBITDA 229 209 -9 355 299 -16 584 508 -13
EBIT 1 66 62 -6 243 186 -23 309 248 -20
thereof Equity-method earnings 11 18 +64
OCFbit 525 540 +3
Investments 637 961 +51
42
1. Adjusted for non operating effectsSegments: PreussenElektra E.ON 9M 2017 results
PreussenElektra Highlights
EBIT1 € m – Lower volumes due to Brokdorf outage
+3%
– Lower achieved power prices
345 357 – Additional depreciation of asset retirement costs (ARC)
+ End of nuclear fuel tax payments in 2016
+ One-off effects in relation to court case & KFK solution
9M 2016 9M 2017
Hedged Prices Germany (€/MWh) as of 30 Sept 2017
€m PreussenElektra
9M 2016 9M 2017 % YoY 2016 100% 37
Revenue 1,068 1,230 +15
Details
EBITDA 1 410 497 +21 2017 100% 32
1
EBIT 345 357 +3
thereof Equity-method earnings 50 44 -12 2018 94% 27
OCFbIT 259 -7,069 -2,829
Investments 12 10 -17 2019 62% 28
43
1. Adjusted for non operating effectsAdjusted Net Income E.ON 9M 2017 results
€m 9M 2016 9M 2017 % YoY
Economic interest
1
3,640 3,540 -3
EBITDA
expense (net)
Depreciation/amortization -1,329 -1,423 -7 • Improvement mainly driven
1
2,311 2,117 -8
by significant lower
EBIT
interest accretion of
Economic interest expense (net) -1,118 -575 +49 nuclear provisions and
1
other interest expenses
EBT 1,193 1,542 +29
1
Income Taxes on EBT -387 -386 +0
% of EBT 1
-32% -25% - Tax rate
• Tax rate of 25% (vs. 32%
Non-controlling interests -165 -191 -16
in 9M 2016)
1
Adjusted net income 641 965 +51
44
1. Adjusted for non operating effectsReconciliation of Adj. EBIT to E.ON 9M 2017 results
IFRS Net Income
€m 9M 2016 9M 2017 % YoY
1
EBITDA 3,640 3,540 -3
Depreciation/Amortization/Impairments -1,329 -1,423 -7
1
EBIT 2,311 2,117 -8
Economic interest expense (net) -1,118 -575 +49
Net book gains 1 288 n/a
Restructuring -221 -173 +22
Mark-to-market valuation of derivatives 768 -453 -159
Impairments (net) -44 5 +111
Other non-operating earnings -79 3,298 n/a
Income/Loss from continuing operations before income taxes 1,618 4,507 +179
Income taxes -624 -604 +3
Income/loss from discontinued operations, net -10,293 0 +100
Non-controlling interests -5,351 197 +104
Net income/loss attributable to shareholders of E.ON SE -3,948 3,706 +194
45
1. Adjusted for non operating effectsCash effective investments E.ON 9M 2017 results
by unit
€m 9M 2016 9M 2017 % YoY
Energy Networks 866 864 -0
Customer Solutions 392 350 -11
Renewables 637 961 +51
Corporate Functions & Other 78 42 -46
Consolidation -4 -5 -25
PreussenElektra 12 10 -17
Investments 1,981 2,222 +12
46
1. Adjusted for non operating effectsEconomic Net Debt1 E.ON 9M 2017 results €m 31 Dec 2016 30 June 2017 30 Sept 2017 Liquid funds 8,573 14,252 5,450 Non-current securities 4,327 3,850 3,801 Financial liabilities -14,227 -14,691 -14,304 Adjustment FX hedging ² 390 311 158 Net financial position -937 3,722 -4,895 Provisions for pensions -4,009 -3,748 -3,586 Asset retirement obligations -21,374 -21,459 -11,218 Economic net debt -26,320 -21,485 -19,699 1. Economic net debt definition takes into account the decommissioning provisions calculated with a real discount rate of 0.0% as opposed to IFRS ARO’s, 2. Net figure; 47 does not include transactions relating to our operating business or asset management
Economic interest expense (net) E.ON 9M 2017 results
Difference
€m 9M 2016 9M 2017
(in € m)
Interest from financial assets/liabilities -467 -522 -55
Interest cost from provisions for pensions and similar provisions -64 -61 +2
Accretion of provisions for retirement obligation and similar provisions -647 -49 +597
Construction period interests¹ 29 29 +0
Others 31 29 -2
net interest result -1,118 -575 +543
1. Borrowing cost that are directly attributable to the acquisition, construction or production of a qualified asset.
Borrowing cost are (virtual) interest costs incurred by an entity in connection with the borrowing of funds. (interest 48
rate: 5.6%)Financial Liabilities E.ON 9M 2017 results
Split Financial Liabilities Maturity profile (as of end 9M 2017)1
€ bn € bn
4.8
30 Sept
2017
Bonds -12.5
in EUR -5.7
in GBP -3.9
in USD -2.5
2.1
in JPY -0.2 1.8
in other denominations -0.2 1.4
Promissory notes -0.4 1.1
0.8
Commercial papers 0.0 0.6
0.4
Other liabilities -1.4 0.1
Total -14.3
2017 2018 2019 2020 2021 2022 2023 2024 ≥2025
EUR GBP USD YEN Other
49
1. Bonds and promissory notes issued by E.ON SE, E.ON International Finance B.V. and E.ON Beteiligungen GmbH (fully guaranteed by E.ON SE)Appendix Contacts, Calendar & Disclaimer
E.ON Investor Relations contacts
Alexander Karnick T+49 (201) 184 28 38
Head of Investor Relations alexander.karnick@eon.com
Martina Burger T +49 (201) 184 28 07
Manager Investor Relations martina.burger@eon.com
Dr. Stephan Schönefuß T +49 (201) 184 28 22
Manager Investor Relations stephan.schoenefuss@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
51Financial calendar & important links
Financial calendar
March 14, 2018 Annual Report 2017
May 8, 2018 Interim Report I: January – March 2018
May 9, 2018 2018 Annual Shareholders Meeting
August 8, 2018 Interim Report II: January – June 2018
November 14, 2018 Interim Report III: January – September 2018
Important links
Presentations https://www.eon.com/en/investor-relations/presentations.html
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
Shareholders Meeting https://www.eon.com/en/investor-relations/shareholders-meeting.html
Bonds / Creditor Relations https://www.eon.com/en/investor-relations/bonds.html
52Disclaimer
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.
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 rounded figures may not add up exactly to the totals contained in the respective tables and charts.
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